US' Levi Strauss & Co posts net revenue of $1.6 bn in Q4 FY22

Levi Strauss & Co’s direct-to-Consumer (DTC) net revenues decreased 2 per cent on a reported basis and increased 6 per cent on a constant-currency basis in Q4 FY22, driven by strong growth in company-operated stores in the Americas and Asia, offsetting a decline in Europe primarily due to store closures in Russia. As a percentage of fourth quarter consolidated net revenues, sales from DTC stores and e-commerce comprised 31 per cent and 8 per cent respectively, the company said in a press release.

Wholesale net revenues declined 8 per cent on a reported basis, or 4 per cent on a constant-currency basis.

The company’s global digital net revenues were down 7 per cent year-over-year (YoY), yet up approximately 29 per cent versus pre-pandemic, as consumers returned to in-store shopping. Digital sales comprised approximately 20 per cent of Q4 FY22 net revenues, as compared to 16 per cent of Q4 FY19 net revenues.

Selling, general, and administrative expenses were $738 million in Q4 FY22 compared to $791 million last year. Adjusted Selling, general, and administrative expense was $745 million compared to $776 million last year.

The company’s operating income was $137 million compared to $186 million last year, while adjusted EBIT was $142 million compared to $203 million last. Adjusted EBIT margin was 9 per cent, 300 basis points lower on a reported basis and 210 basis points lower on a constant-currency basis.

Levi Strauss & Co’s net income was $151 million in Q4 FY22 compared to $153 million last year. Furthermore, the diluted earnings per share was $0.38 compared to $0.37 last year.

In the Americas, net revenues in Q4 FY22 decreased 5 per cent on both reported and constant-currency bases, as growth in the DTC business was offset by a decline in the wholesale channel. In Europe, net revenues decreased 18 per cent on a reported basis. On a constant-currency basis, net revenues declined 8 per cent. In Asia, net revenues increased 1 per cent on a reported basis and 17 per cent on a constant-currency basis.

Combined net revenues in Q4 FY22 for Dockers and Beyond Yoga increased 28 per cent YoY on a reported basis and 33 per cent YoY on a constant-currency basis.

For FY22, reported net revenues were $6.2 billion, up 7 per cent versus FY21. Gross margin was 57.5 per cent and adjusted gross margin was 57.6 per cent. The company’s net income in FY22 was $569 million, and adjusted net income was $604 million, up from $601 million in FY21.

For FY23, Levi Strauss & Co expects net revenues between $6.3 billion and $6.4 billion, reflecting reported revenue growth of 1.5-3 per cent YoY, inclusive of 200 basis points of headwinds split evenly from foreign exchange and the suspension of our business operations in Russia. The company estimates the adjusted diluted EPS in FY23 to be round $1.30 to $1.40.

Fibre2Fashion News Desk (DP)