Levi Strauss exceeds expectations in Q1 despite declining sales

US clothing supplier Levi Strauss & Co. suffered a drop in sales and red figures in the first quarter of the 2023/24 financial year. Nevertheless, the results published on Wednesday evening exceeded market expectations. In response, the company raised its profit forecast.

Over the three months prior to 25 February, turnover amounted to just under 1.56 billion dollars, which corresponds to a decline of 8 percent compared to the same quarter of the previous year. The clothing supplier explained the decline was due to changed delivery dates, the withdrawal from the Russian business and the discontinuation of the Denizen brand. Without these factors, sales would have been roughly on a par with the previous year, according to a statement.

The company raises its profit forecast

Lower costs and a favourable product mix led to an increase in the gross margin. However, one-off expenses for restructuring measures totalling 116 million dollars had a negative impact on the result. The bottom line was therefore a net loss of 11 million dollars, following a profit of 115 million dollars in the same quarter of the previous year. Its adjusted net result shrank by 24 percent to 103 million dollars.

In view of the surprisingly solid figures, the company has raised its earnings forecast for the full financial year. Adjusted earnings per share are now expected to be between 1.17 and 1.27 dollars. Previously, the target range had been 1.15 to 1.25 dollars. In terms of turnover, management is still aiming for growth between 1 to 3 percent.