US-based denim jeans manufacturer and clothing company Levi Strauss & Co has generated $1.5bn in net revenues in the third quarter (Q3) of fiscal year (FY) 2023.
This is a decrease of 2% on a constant-currency basis against the same period in FY22.
During the quarter ending 27 August 2023, the company’s direct-to-consumer (DTC) net revenues increased 14% from the previous year's quarter, accounting for 40% of total net revenues.
Net revenues for its e-commerce business grew 19% over the quarter.
Regionally, Levi Strauss’ net revenue in the Americas and Europe dropped 5% and 2%, respectively, on a reported basis in Q3 FY23.
In Asia, the company’s revenue rose by 12% on a reported basis and 18% on a constant-currency basis.
Its operating margin was 2.3% in Q3 FY23, down from 13.1% in Q3 202. Its gross margin also declined by 130 basis points (bps) to 55.6% over the quarter.
Levi Strauss saw its net income decline significantly to $10m in Q3 FY23, down 94% as reported from $173m in Q3 2022.
Its adjusted net income also dropped 31% to $112m during the quarter.
The company reported diluted earnings per share (EPS) of $0.02 in Q3 FY23, down from $0.43 a year ago.
Levi Strauss & Co chief executive officer and president Chip Bergh said: “In the third quarter, we delivered double-digit growth in our direct-to-consumer business, driven by strong comp-store gains, which helped offset continued softness in the wholesale channel, primarily in the US.
“We are focused on the levers within our control and the actions we took in the third quarter are beginning to drive improvements in US wholesale trends. As we look longer term, we remain confident in our ability to achieve our goals given the global strength of the Levi’s brand, the momentum in our direct-to-consumer business globally and the exceptional growth potential of our product portfolio and our international business.”
For the full year of 2023, Levi Strauss expects its reported net revenues to be flat to up 1% year-over-year (YoY).
It also expects adjusted diluted EPS to be on the lower end of the previously guided range of $1.10 to $1.20.
