Levi Strauss continues to decline. With half of the year advanced, and enough time for Michelle Gass, appointed CEO at the beginning of the year, to take over the reins of the company, the American giant of the denim your business is still not on track.
In the first six months of the fiscal year (ended May 26), the company recorded sales worth $2,998 million, 1% less than in the same period the previous year. The company’s net profit, however, has plummeted to $7.3 million.compared to the $113 million that Levi’s earned in the first half of 2022.
Although the giant has managed to keep its income more or less stable, The company’s restructuring costs have skyrocketed to $171.3 millioncompared to the 17.8 million dollars that the company dedicated to this part of its business in the first six months of the previous year.
Levi’s has multiplied restructuring costs to $171.3 million
This increase in spending is a consequence, in fact, of Levi’s own plan to accelerate its profitable growth: the Project Fuel. The entry of Gass as CEO in 2024 put this transformation plan into operation, for which it was announced a staff cut of between 10% and 15% on a global scale and a transition towards the model direct-to-consumerreducing the weight of wholesale sales.
The layoffs and store closures, for example, associated with these decisions is what has ended up raising Levi’s expenses and, consequently, sinking its net income.
By markets, the giant has managed to capitalize on its bet in America, its local market. In the first six months of the current fiscal year, Levi’s had a turnover of 1.448 billion euros on the continent, 0.3% more than in the same period in 2022. In Asia, the company has managed to increase its sales even further, to 548 million dollars, 5.3% more.
The giant has managed to reduce the weight of the wholesale in the six months of 2024
The good performance in both markets, however, has been hindered by the European market, where the company has reduced its turnover by 5.2%In the first six months, Levi’s had sales of $777.2 million in Europe, compared to $820.1 million in 2022.
The company’s commitment to retail sales has materialized in the first half of the year. On the one hand, while these have increased by 9%, reaching a turnover of 1,426 million dollars, the channel wholesale it has been reduced. Wholesale sales contracted 7.7% in the first six months, to $1,572 million.
