(CercleFinance.com) – Levi’s unveiled better-than-expected quarterly results on Thursday, boosted by its direct-to-consumer sales activities, but the decline in its margins reflects the still marked impact of inflation.
Its adjusted gross margin thus fell to 55.8% over the three months to the end of February, against a historic high of 59.4% a year earlier, while its adjusted operating margin fell by 14, 9% to 11%.
Selling, general and administrative expenses for the quarter increased to $785 million, from $709 million a year earlier, due in particular to advertising investments due to the celebration of the 150th anniversary of its flagship product, the 501 jeans.
At $1.7 billion, revenue increased 6% as reported and 9% at constant exchange rates driven by growth in direct-to-consumer (DTC) sales, which grew 12% in published data and 16% at constant exchange rates.
Net income fell to $115 million, or 29 cents per share, from $196 million (48 cents) a year earlier.
Excluding exceptional items, the group’s profit was 34 cents per share, where analysts on average had expected an adjusted profit of 32 cents per share.
For its current fiscal year, the San Francisco group still says it expects a turnover increase of 1.5% to 3%, that is to say between 6.3 and 6.4 billion dollars, for adjusted EPS between $1.30 and $1.40.
Following this publication, the title fell by more than 11% Thursday morning in the first exchanges on the New York Stock Exchange.
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