Levi’s this week showed the growing importance of both direct to consumer and digital sales to its business in the second quarter of its financial year.
More than a third (37%) of sales were made direct to consumers (DTC) in the three months to May 29 2022. The clothing brand reported that 30% of its sales were DTC through its stores, and 7% via ecommerce. Revenues from direct sales grew by 16% on last year, following a 23% increase in store numbers.
Overall about 20% of second quarter revenues were through digital channels, following a 3% rise on the same time last year, when sales had risen by 75%. In the Americas, net digital revenues grew by 17% to represent 18% of sales, while in Europe, digital revenues declined by 30% after previously growing by more than 100% a year earlier. They represented 23% of sales in the quarter. In Asia, digital net revenues grew 17% to account for 15% of sales.
Overall Levi’s net revenues came in at $1.5bn (£1.3bn) – 15% up on the same time last year. Wholesale revenues also grew by 15%. The Americas remain Levi Strauss’ largest market (+17% to $776), followed by Europe (+3% to £367m) and Asia (+16% to $222m).
Group net income – a measure of profitability – came in at $50m (£44.7m), down 23% from $65m (£58m) last time. That reflects a 29% fall in operating income to $76m (£67.9m) after the brand wrote off $60m (£53.5m) in relation to the Russia-Ukraine crisis.
In the first half of the year, net revenue grew by 19% to $3.1bn (£2.8bn), and net income by 19% to $246m (£218.99m).
Chip Bergh, president and chief executive of Levi Strauss & Co, says: “Our second quarter results demonstrate the power of our strategy, which continues to support strong revenue growth and margin expansion. Our brands are resonating with consumers across geographies, channels and product categories. By continuing to advance our most impactful growth drivers – being brand-led, direct to consumer first, and diversifying the portfolio, we are well-positioned to continue to drive growth and create significant value for all our stakeholders.”
Levi’s is ranked Top250 in RXUK Top500 research