Levi Strauss & Co Revenue Soars 22% In Q1 2018
For the first quarter of 2018, the revenues of Levi Strauss & Co grew 22 per cent on a reported basis and 16 per cent excluding $55 million driven by broad-based Levi’s brand growth in all regions and channels. On a reported basis, direct-to-consumer revenues grew 24 per cent on performance and expansion of the retail network, as well as ecommerce growth.
The company had 56 more company-operated stores at the end of the first quarter 2018 than it did a year prior. The wholesale revenues grew 21 per cent primarily reflecting higher revenues from Europe and the Americas. The operating income of $174 million was up 61 per cent for the first quarter compared to the same quarter of fiscal 2017, and operating margin increased to 13 per cent, primarily reflecting the revenue growth and higher gross margins, partially offset by higher SG&A. The SG&A for the reported period was $564 million compared to $456 million in the same quarter of fiscal 2017.
On a reported basis, gross margin for the first quarter was 54.9 per cent of revenues compared with 51.2 per cent in the same quarter of fiscal 2017, reflecting the margin benefit from revenue growth in the direct-to-consumer channel and international business, lower product sourcing costs and a favorable transactional impact of currency. The adjusted EBIT grew 59 per cent reflecting higher gross margins and the revenue growth.
In the first quarter of 2018, the company’s net income declined $79 million due to a $136 million provisional non-cash tax charge as a result of the enactment of the 2017 Tax Cuts and Jobs Act. Excluding this non-cash charge, adjusted net income was $117 million, nearly double last year’s $60 million.
“The momentum and growth trends we saw in the back half of last year not only continued but accelerated in the first quarter. Our results clearly demonstrate that our strategies are working and that the incremental investments we are making in marketing, direct-to-consumer expansion and our more diversified portfolio are paying off,” said Chip Bergh, president and chief executive officer, Levi Strauss & Co.