Levi Strauss’ Q2 results beat the company’s own expectations with a third straight quarter of double-digit sales growth across all regions. Levi Strauss has had a good run over the past three quarters, continuing to outpace industry peers even in a strong denim fashion cycle.
Levi’s growth was the strongest in Europe, with net revenue up 31 per cent and operating income up 51 per cent through the quarter ended May 28, about a month before the EU put a 25 per cent tariff on imported jeans.
Women’s apparel and tops were the strongest sales drivers in the quarter in Europe. Revenue grew 13 per cent in Asia compared with the year prior and 11 per cent in the Americas.
The company has a fairly complex supply chain so diversification is important. It sources from about 26 countries. No country supplies more than 20 per cent of its needs. Its direct-to-consumer business and retail partnerships are both growing. Direct to consumer, both store and online combined, logged its tenth straight quarter of double-digit sales growth. But the new 25 per cent tariffs on US jeans in the European Union and a trade war with China could spell trouble for Levi's and other iconic American brands.
