Levi Strauss & Co had a strong start to the year with better-than-expected sales growth in the first fiscal quarter.
The company’s net revenues reached $1.5 billion during the quarter ended March 2, up 3 per cent on a reported basis and 9 per cent on an organic basis.
In the Americas, net revenues rose 11 per cent on an organic basis, with the US growing 8 per cent. Europe net revenues increased 3 per cent, while Asia soared 10 per cent on an organic basis.
On the bottom line, operating margin rose from 0.04 per cent a year earlier to 12.5 per cent. The company also swung to net income of $140 million from a loss of $10 million.
“We exceeded revenue and profitability expectations in Q1 marking a strong start to the year, another proof point that our transformation strategy is working,” said Michelle Gass, president and CEO.
“While we recognize that we are operating in an uncertain environment, our global footprint, strong margin structure, and agile supply chain position us to navigate the balance of the year and beyond,” Gass added.
Levi & Strauss noted that its first-quarter results were based on continuing operations, which excludes approximately $67 million of net revenues related to Dockers.
The company commenced a sale process of the Dockers business during the quarter. It did not disclose other financial details of the deal but expects the transaction to be completed within this fiscal year.
For the full year, the retailer expects net revenues from continuing operations to increase 3.5-4.5 per cent.
