Levi Strauss profit suffers on weak Americas wholesale
today Oct 9, 2019
Levi Strauss & Co reported a 4% drop in third-quarter profit on Tuesday, as the denim apparel maker struggled to grow its wholesale business in its highest revenue-generating market, the Americas.
Reduced shipments to off price stores and the impact of a delayed acquisition of a South American distributor drove net revenue down about 3% in the region, the first fall since the 165-year-old company went public in March.
“U.S. wholesale was challenged... particularly the legacy department stores and chain stores, where (the) much publicized traffic declines have negatively impacted our business,” Chief Executive Officer Chip Bergh said in an interview with Reuters.
The deteriorating retail landscape has forced longstanding brick-and-mortar chains, including J.C. Penney Co Inc, to explore options, as they struggle to boost their e-commerce business to compete with the likes of Amazon.com Inc.
Bergh said Levi’s has been focusing on selling directly to customers through its stores and online than through off price retailers.
Levi’s teamed up with model Chanel Iman and New York Giants player Sterling Shepard during the quarter to create an exclusive drop, launching limited merchandise, for e-commerce retailer Amazon.com Inc’s fashion line.
Excluding one-time items, the company earned 31 cents per share, 3 cents above expectations. Net revenue rose 3.8% to $1.45 billion, compared with the average estimate of $1.44 billion projected by analysts, according to IBES data from Refinitiv.
Shares of the company, which have fallen about 14% since its market debut, were down 0.2% in extended trading.
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