Levi Strauss & Co. saw sales fall significantly in the first quarter due to store closures in Europe. The jeans manufacturer is nevertheless raising its forecast for the current year, believing that the worst of the corona crisis is behind it.
Levi's recorded sales of 1.31 billion dollars (1.1 billion euros) in the period from December to February, a decrease of 13% compared to the same period last year. The double-digit decline in sales is mainly due to the ongoing store closures in some markets. For example, 4 out of 10 stores in Europe are currently completely closed, while others are only partially open, according to the retailer. In the United States, too, there is significantly less traffic on the high streets.
The fall in sales in the store was partly compensated by an increase of one quarter in the company's own e-commerce revenues. Total online sales, including digital sales by wholesale partners, even increased by 41%.
The fashion company's net profit came to 142.5 million dollars (120 million euros) compared to 152.7 million dollars (128 million euros) a year ago. "These results point to really good evidence that we will emerge from the pandemic a stronger company," CEO Chip Bergh told CNBC. “We beat our own expectations internally and beat external expectations, despite having a third of our stores closed in Europe over the entire quarter.”
Levi's assumes the crisis is over and is raising its expectations for the first half of the year. In that period, sales should increase by 24-25%. CFO Harmit Singh believes sales could return to pre-pandemic levels by the fourth quarter.