US jeans maker Levi Strauss said on Wednesday that its revenues grew more than forecast in the lead-up to the festive season, even as it navigated global supply chain woes, with Asia seeing a strong recovery.
A shift to casual clothing during the coronavirus pandemic has boosted demand for Levi’s jeans, including newer styles with a looser fit, as consumers work from home and in some cases gain weight.
The San Francisco-based company also got a boost last quarter as more shoppers returned to stores. It reported a 28% increase in net revenues for company-operated stores compared with the same period a year ago.
Net revenues jumped 22% to $1.7 billion in the three months to the end of November, surpassing analysts’ forecasts of $1.68 billion and the company’s own outlook that sales would grow 21%. Revenues were up 7% over pre-pandemic 2019.
“We had a strong finish to 2021 and I can confidently say that we are a stronger company than ever before,” Chip Bergh, chief executive, said.
China Growth Offset
In China growth in wholesale and company-operated store sales was offset by the closure of 80 franchised outlets.
Harmit Singh, chief financial officer, said Australia, New Zealand, India, South Korea and Malaysia all delivered growth in the quarter.
“Asia is about 15-16% of our business,” Singh said. “Coming back to pre-pandemic levels, Asia will make a sizeable difference.”
Singh said its China operations made a profit in the fourth quarter after losses in the previous three months.
Globally, Levi’s was boosted by baggier fashions. “Women’s bottoms continue to outperform, up an exceptional 21% as the trend towards high rise and looser fashion fits drove significant growth,” Bergh said.
“And demand remained robust for our iconic 501, which was up 23% to 2019, driven by strong gains with both men and women.”
- George Russell