Levi Strauss: direct sales drive business in the first quarter

By

Olivier Guyot

Published
Apr 13, 2016

Europe is a source of good news for the Levi Strauss group. In the first quarter, closed on 28th February, the parent company of Levi's and Dockers posted a figure of $1.055 billion (€929 million), recording a flat revenue compared with the same period last year.

However, excluding exchange rate effects, business grew 5%, driven notably by a double-digit rise in the group's direct-to-consumer sales operations, via its stores in Europe and Asia, and via e-commerce. On the contrary, the wholesale business recorded a growth of only 1%.

The Americas region remained the group's leading market, though suffering a 1% decline, down to $571 million. Excluding exchange rate effects, business rose 2%, chiefly thanks to Mexico, while wholesale revenue slipped in the USA. Having achieved $276 million in the quarter, Europe's results remained stable and, before exchange rate adjustments, its revenue grew 8%.

In Asia, the group recorded a 3% rise up to $209 million, and a 10% one before exchange rate adjustments, notably thanks to the retail network's expansion.

Actually, the Old Continent was very successful in terms of profitability. Europe's EBIT rose by 6%, or 16% before exchange rate adjustments. Thus the group reported an EBIT of $62 million, while with $80 million the Americas region suffered a 20% downturn, and Asia's result shrank by 2%, down to $47 million.

In conclusion, the quarter turned out to be positive for the group, which explained it has better managed the impact of exchange rate fluctuations. EBITDA rose by 71% in the quarter, reaching $66 million.