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Levi’s Booming European Business Offsets Flat U.S. Sales

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American denim brand Levi Strauss & Co. is having a better go at it in Europe.

On Monday, the company reported a profit of $31 million for Q2 ended May 29, a leap from $12 million the same quarter one year prior. The jump in profit was due to a decline in charges related to the company’s productivity initiative and a debt extinguishment loss from the prior year.

However, revenue was flat at $1.01 billion, as wholesaling in the Americas took a dip, offset by growth in Europe and Asia.

In the Americas, net revenues declined four percent to $589 million. Department stores continue to be a challenge for the brand. Wholesale revenues in the U.S. while direct-to-consumer sales for the region grew low double-digits for the second quarter.

In an interview with The Wall Street Journal, Levi’s President and CEO Chip Bergh said, “The traditional department store channel is and has been challenged, and that’s a big chunk of our business in the U.S. We are not giving up on it, to be clear.”

Currency translation had zero impact on net revenues in the company’s European business, where the classic 501 has experienced a renaissance in popularity for both men and women. Net revenues increased eight percent to $241 million, driven by strong direct-to-consumer growth and expansion.

In Asia, Levi’s eight percent revenue growth was a product of expansion of the company-operated retail network.

In a statement, Bergh said the company aims to focus on what it can control and remains “committed to delivering our priorities and financial objectives for the full year.”

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