Levi's digital net income increased 41%, but still could not offset the 13% decline in sales in the first quarter

According to the report, in the first quarter of 2021, Levi's net income was US$1.306 billion, down 13% from the same period last year. This was mainly due to the closure of offline retail stores and reduced traffic during the COVID-19 pandemic.

Notably, the company's global digital net revenues, which include net revenues attributable to the company's e-commerce sites and online business for pure play and traditional wholesale customers, increased by approximately 41% year-over-year and accounted for approximately 26% of net revenues in the first quarter of 2021, up from approximately 16% in the first quarter of last year. Within the digital business, net revenues from the company's e-commerce sites accounted for 10% of the company's total net revenues in the first quarter of 2021, up from 7% in the same period last year.

In the Americas, reported net revenue decreased 14%. The decrease in net revenue was partially offset by a 15% increase in the company's operated e-commerce business, including gains from accelerated omnichannel initiatives and growth in the U.S. wholesale business driven by strength in the Levi's and Signature brands. Operating income in the Americas increased as the company's cost reduction initiatives in response to the COVID-19 pandemic drove higher gross margins and lower SG&A expenses as the pandemic continued to adversely impact the region.

In Europe, net revenues fell 16% as reported and 22% at constant exchange rates, impacted by COVID-19 store closures . About a third of stores in the region were closed during the quarter, primarily in high-volume markets. The company's e-commerce business and broader digital business achieved strong growth of 35% and 73%, respectively, during the quarter.

In Asia, net revenues decreased 5% as reported and 8% in constant currency. The first quarter net revenue decline was due to the impact of the COVID-19 pandemic across channels and markets , partially offset by e-commerce and the region's broader digital footprint, which achieved strong growth of 54% and 68%, respectively, in the quarter . Notably, China grew 30% year-over-year across all channels .

According to Levi's CEO, although sales fell in the first quarter, they still exceeded internal expectations and the company will continue to work hard to restore its business faster than expected.

Levi

First quarter

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