Levi’s Strauss & Co.’s (LS&Co.) Q2 performance even surprised the company itself. The company reported Tuesday its third consecutive quarter of double-digit revenue growth, and once again, grew across all three regions in every channel and every category.
In a Nutshell: LS&Co. is reaping the benefits of being an iconic name, both domestically and globally. The company’s Q2 revenues increased 17 percent, driven by growth in both its wholesale and direct-to-consumer segments. In the Americas, the company saw sales increase 11 percent, in Europe 19 percent and in Asia 9 percent.
As a result, the San Francisco-based company raised its guidance to 8 percent to 10 percent in constant currency terms.
LS&Co. said this profitable growth is ahead of peer and category growth and demonstrates that it is a different company today than five years ago.
Sales: Net revenues increased 17 percent on a reported basis and 13 percent excluding $35 million in favorable currency translation effects, driven by Levi’s brand growth in all regions and channels.
Direct-to-consumer revenues from both online and brick-and-mortar grew 19 percent. The company had 53 more company-operated stores at the end of the second quarter of 2018 than it did a year prior. Wholesale reported revenues grew 14 percent reflecting higher revenues in all regions.
The Levi’s brand appears to be stronger than ever with 12 percent growth. As the “unofficial uniform” of Coachella this year, Levi’s women’s business grew 30 percent and its tops business increased 38 percent, driven by the popularity of logo tees and Trucker jackets.
Earnings: LS&Co.’s net income increased $59 million primarily reflecting gains on the company’s hedging contracts in the second quarter of 2018 as compared with losses on hedging contracts and a debt refinancing charge in the second quarter of 2017.
CEO’s Take: “We delivered our third consecutive quarter of double-digit revenue growth, driven by the disciplined execution of our strategies and our more diversified portfolio,” Chip Bergh, president and chief executive officer of Levi Strauss & Co., said. “These results have outpaced the industry and exceeded even our own expectations, and as a result, we are raising our full-year revenue guidance.”