Levi’s Sales Fell In Q1 Amid Fresh Lockdowns in Europe

By Adriaan Brits Friday, April 9, 2021

Levi Strauss & Co, the US clothing company behind the popular Levi’s brand denim jeans, reported Q1 earnings and guidance that pushed its shares 3.5% higher in pre-market trading Friday.

Closeup of a Levi Strauss jeans label.

Guidance Upgraded Despite Falling Sales

The company reported earnings per share (EPS) of $0.34, representing a beat of over 35% compared to the $0.25 per share expected from the surveyed market analysts. Business revenue for its fiscal quarter ended February 28 came in at $1.31 billion, again higher than the $1.25 per share expected from Wall Street.

Still, business revenue for the quarter fell 13% from $1.51 billion a year earlier. The double-digit plunge in sales is a result of the reduced foot traffic in its stores worldwide. Fresh COVID-19 lockdowns, primarily in Europe, are hurting sales, the company said. Over 40% of Levis’ stores in Europe are currently closed while others work on reduced hours.

The CEO of Levi’s, Chip Bergh, described Q1 results as “strong,” which reflects the “faster-than-expected recovery.” Levi’s said its total available liquidity is $2.8 billion with cash and cash equivalents at the end of the quarter sitting at $2 billion.

"We continue to lean into our strategies – leading with our brands, investing in direct-to-consumer and diversifying our business – while still operating prudently to manage the ongoing uncertainty, especially in Europe. As the vaccine rollout continues and consumer excitement returns, I am more confident than ever that we will emerge from the pandemic a stronger business and drive sustainable, profitable growth,” he added.

The clothing business said its direct-to-consumer (DTC) sales plunged 26%, again due to a lower number of customers visiting Levi’s stores. On the other hand, digital sales gained 25% to partially offset lower DTC business sales.

Still, the company upgraded its Q2 outlook as business and industry trends are improving. However, the company still expects to see its profit and sales under pressure in the second quarter of this year.

“Although quarterly trends continue to improve sequentially, the ultimate impact of the COVID-19 pandemic remains highly uncertain. The company expects that its business and results of operations, including net revenues, earnings and cash flows, will continue to be significantly adversely impacted at least through the second quarter of 2021,” the company said.

Assuming that the COVID-19 outbreak doesn’t worsen, Levi’s expects business sales to grow 24% to 25% in the second quarter. While business analysts were expecting Q2 earnings guidance of $0.05, the clothing company said it is projecting to earn between $0.07 and $0.08 on improving business trends.

“We beat our own expectations internally [and] beat external expectations, despite having a third of our stores closed in Europe over the entire quarter,” CEO Bergh told CNBC.

Levi's stock soared over 3.5% in pre-trading Friday to push the company’s market capitalization over $10 billion.


Levi’s announced its sales fell 13% in Q1, but revenue and profit still came in higher-than-expected. The company also added that over 40% of its stores in Europe are closed, a situation that is likely to extend through Q2.

About the Author

Headshot for author Adriaan Brits
As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.

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