Where the pandemic complained Levi Strauss & Co.With its income, it has supported a growing part of the long-standing denim company.
Despite a double-digit decline in sales in the third quarter, Levi’s managed to not only make a profit but also make the e-commerce business profitable, CEO Chip Bergh told CNBC’s Jim Cramer on Wednesday.
“We’ll see e-commerce keep growing,” he said in oneBad money“Interview.” We’re profitable a year ahead of schedule, despite all of the accelerated investments we’ve made. “
Levi’s total sales fell nearly 27% for the three-month period ended August 23. However, some of the lost business was offset by a 52% growth in the company’s e-commerce sales. E-commerce accounted for 8% of the clothing company’s $ 1.06 billion revenue, double what it was a year ago, Bergh said.
Seven out of ten shoppers on the jeans manufacturer’s website were first-time buyers, he added.
The $ 1.06 billion Levi raised has surpassed the $ 822.2 million expected by Wall Street analysts. The company was also expected to post losses of 22 cents per share, but the company posted earnings of 8 cents per share. The gain was a reversal from when Levi posted a loss in the first few months of the pandemic.
Levi’s has invested heavily in online and brick-and-mortar stores as the retailer seeks to expand its direct-to-consumer services. The company also built on its omnichannel capabilities, which Bergh said have benefited greatly from the pandemic.
“The pandemic compressed what could have been 5 or 10 years and it compressed it into a very, very short window, and I have to say that the acceleration of our e-commerce business has been one of the beneficiaries,” he said .
Aside from the impact of the coronavirus on sales, fashion trends that were further influenced by the new normal have also been positive for Levi.
While the dress code for offices has become less strict over the past few decades, particularly with casual tech jobs, the reality of being at home has a particular impact on the fashion industry. Business and work wear is less needed when working remotely through Zoom, which has resulted in a decline in sales in the suit category. That summer there were bankruptcies in holding companies of dress retailers like Men’s Warehouse and Jos. A bank.
Overall clothing sales have declined, but consumers aren’t just spending money on sports and loungewear. Denim has also benefited from trends towards casualization, Bergh said.
One growth area is women’s shorts, he added.
“The women’s shorts business was in double digits,” he said. “Our entire US women’s wholesale business grew double-digit over the past quarter, and our global women’s bottoms business was responsible for 50% of all online growth worldwide in the past quarter, and our online business grew more than 50% as a percentage of our business really strong results. “