US clothing company Levi Strauss & Co recorded a 3% rise in net revenues to $1.53bn in the first quarter (Q1) of fiscal 2025 (FY25), up from the $1.48bn reported in Q1 FY24.
The company reported that the figure and the rest of the results for the quarter reflect its ongoing operations, excluding around $67m in net revenues from the Dockers brand. The Dockers business has been reclassified as discontinued operations in Q1 FY25.
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During the quarter ending 2 March 2025, the company’s Levi’s brand witnessed an 8% surge in global organic net revenues.
Regionally, the Americas and Asia experienced growth in net revenues by 6% and 7% respectively, while Europe saw a decline in net revenues by 5%.
The company’s direct-to-consumer channels contributed positively with a 9% ascent in net revenues. Wholesale channels faced a downturn with a 3% reduction in net revenues.
A significant turnaround was evident in the company’s profitability, with net income from continuing operations reaching $140m in Q1 FY25, compared to a net loss of $10m in the same period of the previous year.
The rebound was reflected in earnings per share from continuing operations, which stood at $0.35, up from a diluted loss per share of $0.03 in Q1 FY24.
Levi Strauss’ operational efficiency improvements were underscored by an expansion in operating margin to 12.5% and an increase in gross margin of 330 basis points to 62.1%.
The growth in gross margin was attributed mainly to reduced product costs and an advantageous mix of channels and brands.
Adjusted earnings before interest and taxes (EBIT) margin also saw a substantial improvement, climbing by 400 basis points to reach 13.4%, propelled by the enhanced gross margin.
Levi Strauss saw a marginal drop in selling, general and administrative expenses to $749m over the quarter from $756m reported in the first quarter of the previous year.
Levi Strauss & Co president and CEO Michelle Gass stated: “We exceeded revenue and profitability expectations in Q1, marking a strong start to the year – another proof point that our transformation strategy is working.
“The Levi’s brand is stronger than ever, and we will continue to fuel this momentum through a robust product pipeline and by keeping the brand firmly at the centre of culture across the globe. While we recognise 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.”
Levi Strauss has maintained guidance for fiscal 2025 based on continuing operations, excluding the impact of the recent tariffs.
The company anticipates a slight decline in reported net revenue, ranging between 1% and 2%.
Expectations for gross margin are nevertheless optimistic, with an anticipated expansion of 100 basis points to 61.6%.
The adjusted EBIT margin is projected to widen to between 11.4% and 11.6%, representing an increase of 70 to 90 basis points from the base of 10.7%.
In October 2024, Levi Strauss unveiled its first climate transition plan, detailing steps to reduce greenhouse gas emissions by 2030 and aiming for net zero emissions by 2050.
