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Levi Strauss & Co. Reports First-Quarter 2021 Financial Results

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Levi Strauss & Co. (NYSE: LEVI) today announced financial results for the first quarter ended February 28, 2021. Due to the company’s fiscal quarter end, the impacts of the pandemic were not material to the company's results of operations for the first quarter of 2020.

First-Quarter 2021 Results

  • Net revenues of $1,306 million declined 13 percent on a reported and 16 percent on a constant-currency basis compared to the same period in the prior year. The decrease was primarily due to the impacts of the COVID-19 pandemic, including reduced traffic and ongoing closures of company-operated and third-party retail locations for portions of the quarter in certain markets. Additionally, the first quarter of fiscal 2021 did not include the benefit of a Black Friday, as compared to the first quarter of fiscal 2020, which adversely impacted the year-over-year net revenues comparison by approximately three percentage points.
    • The company’s global digital net revenues, which include net revenues attributable to the company's e-commerce sites as well as the online business of its pure-play and traditional wholesale customers, grew approximately 41 percent compared to the same period in the prior year, and comprised approximately 26 percent of first-quarter 2021 net revenues, up from approximately 16 percent in the first quarter of the prior year. Within digital, net revenues from the company's e-commerce sites were 10 percent of first-quarter 2021 total company net revenues, up from 7 percent in the prior year.
  • Reported gross margin increased 250 basis points to 58.2 percent, a record high for the company. Adjusted gross margin increased 200 basis points to 57.7 percent versus the year-ago quarter primarily due to better mix within wholesale, price increases, and lower promotions.
  • Selling, general and administrative (SG&A) expenses of $583 million were around 2019 levels, a 12 percent decline compared to first quarter of 2020; the $78 million decline reflected the company's cost-savings actions, net of continuing to invest in its omni-channel, A.I. and digitization initiatives.
  • The company recorded net income for the quarter of $143 million and Adjusted net income of $140 million, as compared to $153 million and $162 million, respectively, in the first quarter of the prior year. The decline is primarily attributable to the adverse revenue impact of COVID-19, as well as higher interest expense, reflecting the company’s additional borrowing in the prior year to enhance its liquidity position. Interest expense will decline in future quarters as the company issued $500 million of 3.5% coupon U.S. dollar bonds and used the proceeds and cash on hand to repay $800 million of its 5% coupon bonds in March 2021.
  • Adjusted EBIT was $174 million, and Adjusted EBIT margin was 13 percent, 70 basis points higher than the first quarter of 2020 on a reported basis, and 30 basis points higher than the first quarter of 2020 on a constant-currency basis.
  • Diluted EPS was 35 cents and Adjusted diluted EPS was 34 cents.
  • Total inventories, net of reserves, at quarter end decreased two percent compared to a year prior.
  • Total available liquidity of $2.8 billion; cash and cash equivalents at quarter end were $2 billion.

“We've started the year strong, beating our internal expectations even as we are lapping a particularly good quarter in the prior year," said Chip Bergh, chief executive officer of Levi Strauss & Co. "Our strong results this quarter were driven by faster-than-expected recovery in our business from our relentless focus on the priorities that are driving outsized performance. 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.”

“We are very pleased to have exceeded our revenue, margins and EPS expectations during the quarter,” said Harmit Singh, chief financial officer of Levi Strauss & Co. “We are banking the outperformance and our outlook going forward has improved based on the strong demand signals we are seeing in the marketplace. We're delivering substantial gross margin expansion while holding our cost base in-line with 2019 and investing to accelerate growth. This gives me confidence we'll achieve our Adjusted EBIT margin objective of 12 percent-plus once revenues have returned to pre-pandemic levels. This, combined with the increase in our dividend, reflects our commitment to driving value for our shareholders over the long term.”

COVID-19 Update

The company’s top priority continues to be the health and safety of its associates, consumers and the employees of its business partners around the world. During the quarter the company experienced temporary door closures in geographies affected by lockdowns associated with COVID-19 cases; approximately a third of the full store footprint in Europe and 15 percent of doors globally were closed during the quarter. Currently, more than 40 percent of the full store footprint in Europe is closed, with others operating on reduced hours.

As the company continues to navigate the COVID-19 pandemic and its impact, it remains focused on the areas that it believes will drive value and enable it to emerge stronger on the other side, including elevating its brands, investing in digital tools and capabilities, and accelerating efforts to diversify across geographies, product categories and distribution channels, including its direct-to-consumer and digital businesses.

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, and there remains the possibility of additional COVID-19 related inventory and other charges.

First-Quarter Total Company Overview

 

 

Three Months Ended

 

Increase
(Decrease)
As Reported

($ millions, except per-share amounts)

 

February 28,
2021

 

February 23,
2020

 

Net revenues

 

$

1,306

 

 

$

1,506

 

 

(13

)%

Net income

 

$

143

 

 

$

153

 

 

(7

)%

Adjusted net income

 

$

140

 

 

$

162

 

 

(14

)%

Adjusted EBIT

 

$

174

 

 

$

189

 

 

(8

)%

Diluted earnings per share*

 

$

0.35

 

 

$

0.37

 

 

(2

Adjusted diluted earnings per share*

 

$

0.34

 

 

$

0.40

 

 

(6

*Note: per share increase (decrease) compared to prior year displayed in cents

  • Net revenues declined 13 percent on a reported basis, and 16 percent on a constant-currency basis. The decrease was primarily due to the impacts of the COVID-19 pandemic, including reduced traffic and ongoing closures of company-operated and third-party retail locations for portions of the quarter and in certain markets. Wholesale net revenues declined 4 percent, a significant sequential improvement from the fourth quarter of fiscal 2020, reflecting strong performance in the company’s global digital business. Direct-to-consumer net revenues declined 26 percent; the decline in first quarter direct-to-consumer net revenues was driven by lower traffic to brick-and-mortar stores due to the pandemic, particularly in tourist locations, which comprise a substantial portion of the company’s brick and mortar network. The brick and mortar decline was partially offset by 25 percent growth in company operated e-commerce business, including the benefit of accelerating omni-channel initiatives. Direct-to-consumer stores and e-commerce comprised 26 percent and ten percent, respectively, of total company reported net revenues in the first quarter. The lack of a Black Friday in the current year adversely impacted the year-over-year direct-to-consumer net revenues growth comparison by about five percentage points, and total company net revenues comparison by three percentage points.
  • Gross profit was $760 million, as compared to $839 million in the same quarter in the prior year. Gross margin was 58.2 percent of net revenues, up from 55.7 percent in the same quarter of the prior year. The increase in gross margin was primarily due to favorable product mix, price increases, lower promotions and $7.2 million reduction in estimated COVID-19 related inventory charges, largely for adverse fabric purchase commitments, partially offset by a lower proportion of sales in the company's direct-to-consumer channel, which has higher margins.
  • Adjusted gross margin, which excludes the COVID-19 related charges, was 57.7 percent, an increase of 200 basis points compared to prior year, primarily due to favorable product mix, price increases and lower promotions, partially offset by a lower proportion of sales in the company's direct-to-consumer channel, which has higher margins. Favorable currency exchange rates benefited year-over-year comparisons by approximately 70 basis-points.
  • SG&A expenses were $583 million, a 12 percent decline compared to $661 million in the same quarter in the prior year, reflecting the company’s cost-savings actions, net of continuing to invest in its omni-channel, A.I. and digitization initiatives.
  • Operating income of $177 million declined 1% as compared to $179 million in the same quarter in the prior year, as lower net revenues as a result of the continued adverse impact of COVID-19 were offset by higher gross margins and lower SG&A expenses reflecting the company’s cost-reduction initiatives.
  • Net income was $143 million as compared to net income of $153 million in the same quarter of the prior year, due to higher interest expense.
  • Adjusted EBIT of $174 million declined eight percent as compared to $189 million in the same quarter of the prior year. First quarter Adjusted EBIT margin was 13 percent, despite the adverse revenue impact of COVID-19, due to the company’s higher gross margin and cost-reduction initiatives.
  • Adjusted net income was $140 million as compared to Adjusted net income of $162 million in the same quarter of the prior year, due to the decline in Adjusted EBIT and higher interest expense.
  • Adjusted diluted earnings per share declined to $0.34 compared to $0.40 for the same prior-year period in-line with the Adjusted net income decline.

Additional information regarding Adjusted gross margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted net income, and Adjusted diluted earnings per share, as well as amounts presented on a constant-currency basis, all of which are non-GAAP financial measures, is provided at the end of this press release.

First-Quarter Regional Overview

Reported regional net revenues and operating income for the quarter are set forth in the table below:

 

 

Net Revenues

 

Operating Income *

 

 

Three Months Ended

 

% Increase
(Decrease)

 

Three Months Ended

 

% Increase
(Decrease)

($ millions)

 

February 28,
2021

 

February 23,
2020

 

 

February 28,
2021

 

February 23,
2020

 

Americas

 

$

641

 

 

$

746

 

 

(14)

%

 

$

131

 

 

$

124

 

 

6

%

Europe

 

$

429

 

 

$

513

 

 

(16)

%

 

$

111

 

 

$

132

 

 

(16)

%

Asia

 

$

235

 

 

$

248

 

 

(5)

%

 

$

29

 

 

$

33

 

 

(12)

%

* Note: Regional operating income is equal to regional Adjusted EBIT.

  • In the Americas, net revenues declined 14 percent on a reported basis. The region's direct-to-consumer net revenues declined 29 percent and wholesale net revenues declined 5 percent as a result of the continued adverse impact of COVID-19. The decrease in net revenues was partially offset by 15 percent growth in company operated e-commerce business, including the benefit of accelerating omni-channel initiatives, as well as growth of U.S. wholesale driven by strength in the Levi’s and Signature brands. The lack of a Black Friday benefit in the current year adversely impacted the year-over-year direct-to-consumer net revenues growth comparison by about eight percentage points and the total region’s net revenues growth comparison by about four percentage points.

Operating income for the Americas increased due to higher gross margins and lower SG&A expenses driven by the company’s cost reduction initiatives in response to COVID-19 partially offset by lower net revenues as the COVID-19 pandemic continued to adversely impact the region during the quarter.

  • In Europe, net revenues declined 16 percent on a reported basis and 22 percent on a constant-currency basis driven by COVID-19 store closures. During the quarter, approximately one-third of the region’s stores were closed, primarily concentrated in higher volume markets. Sales were strong in markets with fewer closure restrictions, reflecting consumer demand and strength of the brand. The company’s e-commerce business and broader digital footprint experienced strong growth during the quarter of 35 percent and 73 percent respectively. The lack of a Black Friday benefit in the current year adversely impacted the year-over-year direct-to-consumer net revenues growth comparison by about three percentage points and the year-over-year total region’s net revenues growth comparison by about two percentage points.

Europe's operating income declined primarily due to the adverse revenue impacts of COVID-19, partially offset by higher gross margins and declines in SG&A expenses driven by lower variable expenses from lower brick-and-mortar sales as well as the company’s cost reduction initiatives in response to COVID-19.

  • In Asia, net revenues declined five percent on a reported basis and eight percent on a constant-currency basis. The first-quarter decrease in net revenues was due to the impacts of COVID-19 across channels and markets, partially offset by e-commerce and the region's broader digital footprint, which experienced strong growth during the quarter of 54 percent and 68 percent respectively. China grew 30 percent to prior year with growth across all channels.

Operating income for Asia declined primarily due to the adverse revenue impacts of COVID-19, partially offset by higher gross margins and declines in SG&A expenses driven by the company’s cost reduction initiatives in response to COVID-19.

Cash Flow and Balance Sheet

  • Cash and cash equivalents at the end of the first quarter of 2021 of $2.0 billion and short-term investments of $94 million were complemented by $689 million available under the company's revolving credit facility, resulting in a total liquidity position of approximately $2.8 billion.
  • Net debt at the end of the first quarter of 2021 was $(8) million. The company’s leverage ratio was 6.8 at the end of the first quarter of 2021, as compared to 1.4 at the end of the first quarter of 2020, due to the increase in gross debt and adverse impact of COVID-19 on the company’s Adjusted EBIT during the prior twelve months. The company issued $500 million of 3.5% coupon U.S. dollar bonds in February and used the proceeds and cash on hand to repay $800 million of its 5% coupon bonds in March 2021.
  • Cash from operations for the first three months of 2021 decreased to $69 million compared to $198 million for the first three months of 2020. The decrease in cash provided by operating activities is primarily driven by lower sales in comparison to the same period of last year, partially offset by lower spending on inventory and employee incentives.
  • Adjusted free cash flow for the first three months of 2021 was $(9) million, a decline of $6 million compared to the first three months of 2020, primarily reflecting lower cash from operations, which was partially offset by lower repurchases of common stock, lower dividends and lower tax withholding on equity awards.
  • Total inventories were down 2 percent compared to the end of the corresponding prior-year period, despite the sales decline of 13 percent.
  • The company declared and paid a dividend of $0.04 per share in the first quarter totaling approximately $16 million. In April 2021, the company increased the dividend to $0.06 per share for the second quarter totaling approximately $24 million. The dividend will be payable in cash on or after May 25, 2021, to the holders of record of Class A common stock and Class B common stock at the close of business on May 7, 2021. The company will reassess dividend payments for future quarters as circumstances evolve.

Additional information regarding net debt, leverage ratio, and Adjusted free cash flow, all of which are non-GAAP financial measures, is provided at the end of this press release.

Guidance

The company raised its fiscal first-half 2021 reported net revenues outlook to 24-to-25 percent growth compared to the first half of 2020 and raised its first-half Adjusted EPS estimate to 41-to-42 cents. The company plans to share additional details during its investor conference call. The company’s outlook assumes no significant worsening of the COVID-19 pandemic or dramatic incremental closure of global economies.

Investor Conference Call

The company’s first-quarter 2021 investor conference call will be available through a live audio webcast at https://edge.media-server.com/mmc/p/8tsx7i8s on April 8, 2021, at 2 p.m. Pacific / 5 p.m. Eastern or via the following phone numbers: 833-693-0541 in the United States and Canada or +1-661-407-1582 internationally; I.D. No. 5889497. A replay is available the same day on http://www.levistrauss.com/investors/earnings-webcast and will be archived for one quarter. A telephone replay is also available through April 15, 2021, via the following phone numbers: 855-859-2056 in the United States and Canada or +1-404-537-3406 internationally; I.D. No. 5889497.

About Levi Strauss & Co.

Levi Strauss & Co. is one of the world's largest brand-name apparel companies and a global leader in jeanswear. The company designs and markets jeans, casual wear and related accessories for men, women and children under the Levi's®, Dockers®, Signature by Levi Strauss & Co.™, and Denizen® brands. Its products are sold in more than 110 countries worldwide through a combination of chain retailers, department stores, online sites, and a global footprint of approximately 3,000 retail stores and shop-in-shops. Levi Strauss & Co.'s reported 2020 net revenues were $4.5 billion. For more information, go to http://levistrauss.com, and for company news and announcements go to http://investors.levistrauss.com.

Forward Looking Statements

This press release and related conference call contain, in addition to historical information, forward-looking statements, including statements related to the company’s ability to manage its business and liquidity during and after the COVID-19 pandemic, including its ability to forecast its results and re-open stores globally, the timing and effectiveness of global efforts to roll out vaccines, and the impact of potential virus variants and COVID-19 resurgences on the company’s business and results of operations; emerging from the pandemic as a stronger business and driving sustainable, profitable growth; the impact of the COVID-19 pandemic on the company’s results of operations; the company’s prospects for financial performance and growth, including Adjusted EBIT and Adjusted gross margin, following the COVID-19 pandemic and its ability to achieve financial results before the onset of the COVID-19 pandemic; future financial results, including net revenues (on a fiscal and calendar basis), Adjusted gross margin, Adjusted EPS, Adjusted SG&A, and capital expenditures; new store openings; future dividends and share repurchases; future inventory positions; potential future paydowns of existing debt; the impact of continued geographic, product and channel diversification on the company’s financial results; the impact of digitization initiatives on the company’s financial results; the extent to which wholesale customer forward demand signals result in actual sales, and the achievement of diversity, equity and inclusion, and sustainability goals. The company has based these forward-looking statements on its current assumptions, expectations and projections about future events. Words such as, but not limited to, “believe,” “will,” “so we can,” “when,” “anticipate,” “intend,” “estimate,” “expect,” “project,” "confident" and similar expressions are used to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements are necessarily estimates reflecting the best judgment of senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Investors should consider the information contained in the company's filings with the U.S. Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for fiscal year 2020 and its Quarterly Report on Form 10-Q for the quarter ended February 28, 2021, especially in the “Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections. Other unknown or unpredictable factors also could have material adverse effects on future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release and related conference call may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated or, if no date is stated, as of the date of this press release and related conference call. The company is not under any obligation and does not intend to update or revise any of the forward-looking statements contained in this press release and related conference call to reflect circumstances existing after the date of this press release and related conference call or to reflect the occurrence of future events, even if such circumstances or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized.

Non-GAAP Financial Measures

The company reports its financial results in accordance with generally accepted accounting principles in the United States (GAAP) and the rules of the SEC. To supplement its financial statements prepared and presented in accordance with GAAP, the company uses certain non-GAAP financial measures, such as Adjusted gross profit, Adjusted gross margin, Adjusted SG&A, Adjusted EBIT (both reported and on a constant-currency basis), Adjusted EBIT margin (both reported and on a constant-currency basis), Adjusted net income (both reported and on a constant-currency basis), Adjusted diluted earnings per share (both reported and on a constant-currency basis), constant-currency net revenues, net debt, leverage ratio, and Adjusted free cash flow, to provide investors with additional useful information about its financial performance, to enhance the overall understanding of its past performance and future prospects and to allow for greater transparency with respect to important metrics used by management for financial and operating decision-making. The company presents these non-GAAP financial measures to assist investors in seeing its financial performance from management's view and because it believes they provide an additional tool for investors to use in computing the company's core financial performance over multiple periods with other companies in its industry. The tables found below present Adjusted gross profit, Adjusted gross margin, Adjusted SG&A, Adjusted EBIT (both reported and on a constant-currency basis), Adjusted EBIT margin (both reported and on a constant-currency basis), Adjusted net income (both reported and on a constant-currency basis), Adjusted net income margin (both reported and on a constant-currency basis), Adjusted diluted earnings per share (both reported and on a constant-currency basis), constant-currency net revenues, net debt, leverage ratio, and Adjusted free cash flow, and corresponding reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP. Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. Certain items that may be excluded or included in non-GAAP financial measures may be significant items that could impact the company’s financial position, results of operations and cash flows and should therefore be considered in assessing the company’s actual financial condition and performance. Non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgment by management in determining how they are formulated. Some specific limitations include but are not limited to, the fact that such non-GAAP financial measures: (a) do not reflect cash outlays for capital expenditures, contractual commitments or liabilities including pension obligations, post-retirement health benefit obligations and income tax liabilities; (b) do not reflect changes in, or cash requirements for, working capital requirements; and (c) do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on indebtedness. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, the company's financial results prepared in accordance with GAAP. The company urges investors to review the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures included in this press release, and not to rely on any single financial measure to evaluate its business. See “RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES” below for reconciliation to the most comparable GAAP financial measures.

Constant-currency

The company reports certain operating results on a constant-currency basis in order to facilitate period-to-period comparisons of its results without regard to the impact of fluctuating foreign currency exchange rates. The term foreign currency exchange rates refers to the exchange rates used to translate the company's operating results for all countries where the functional currency is not the U.S. Dollar into U.S. Dollars. Because the company is a global company, foreign currency exchange rates used for translation may have a significant effect on its reported results. In general, the company's financial results are affected positively by a weaker U.S. Dollar and are affected negatively by a stronger U.S. Dollar as compared to the foreign currencies in which it conducts its business. References to operating results on a constant-currency basis mean operating results without the impact of foreign currency exchange rate fluctuations.

The company believes disclosure of constant-currency results is helpful to investors because it facilitates period-to-period comparisons of its results by increasing the transparency of the underlying performance by excluding the impact of fluctuating foreign currency exchange rates. However, constant-currency results are non-GAAP financial measures and are not meant to be considered as an alternative or substitute for comparable measures prepared in accordance with GAAP. Constant-currency results have no standardized meaning prescribed by GAAP, are not prepared under any comprehensive set of accounting rules or principles and should be read in conjunction with the company's consolidated financial statements prepared in accordance with GAAP. Constant-currency results have limitations in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies.

The company calculates constant-currency amounts by translating local currency amounts in the prior-year period at actual foreign exchange rates for the current period. Constant-currency results do not eliminate the transaction currency impact, which primarily include the realized and unrealized gains and losses recognized from the measurement and remeasurement of purchases and sales of products in a currency other than the functional currency. Additionally, gross margin is impacted by gains and losses related to the procurement of inventory, primarily products sourced in EUR and USD, by the company's global sourcing organization on behalf of its foreign subsidiaries.

Source: Levi Strauss & Co. Investor Relations

LEVI STRAUSS & CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

 

 

(Unaudited)

 

 

 

 

February 28,
2021

 

November 29,
2020

 

 

 

 

 

 

 

(Dollars in thousands)

ASSETS

Current Assets:

 

 

 

 

Cash and cash equivalents

 

$

1,973,602

 

 

$

1,497,155

 

Short-term investments in marketable securities

 

94,273

 

 

96,531

 

Trade receivables, net

 

600,271

 

 

540,227

 

Inventories

 

835,357

 

 

817,692

 

Other current assets

 

192,092

 

 

174,636

 

Total current assets

 

3,695,595

 

 

3,126,241

 

Property, plant and equipment, net

 

440,857

 

 

454,532

 

Goodwill

 

267,072

 

 

264,768

 

Other intangible assets, net

 

47,274

 

 

47,426

 

Deferred tax assets, net

 

517,202

 

 

497,556

 

Operating lease right-of-use assets, net

 

1,006,107

 

 

988,801

 

Other non-current assets

 

262,087

 

 

261,917

 

Total assets

 

$

6,236,194

 

 

$

5,641,241

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

 

 

 

 

Short-term debt

 

$

8,059

 

 

$

17,631

 

Current maturities of long-term debt

 

789,283

 

 

 

Accounts payable

 

420,616

 

 

375,450

 

Accrued salaries, wages and employee benefits

 

165,855

 

 

179,081

 

Restructuring liabilities

 

45,300

 

 

54,723

 

Accrued income taxes

 

29,206

 

 

21,986

 

Accrued sales returns and allowances

 

193,416

 

 

185,868

 

Short-term operating lease liabilities

 

254,676

 

 

237,142

 

Other accrued liabilities

 

417,321

 

 

477,001

 

Total current liabilities

 

2,323,732

 

 

1,548,882

 

Long-term debt

 

1,262,704

 

 

1,546,700

 

Postretirement medical benefits

 

58,992

 

 

60,249

 

Pension liabilities

 

168,549

 

 

168,721

 

Long-term employee related benefits

 

97,719

 

 

94,654

 

Long-term operating lease liabilities

 

856,103

 

 

858,293

 

Other long-term liabilities

 

61,411

 

 

64,267

 

Total liabilities

 

4,829,210

 

 

4,341,766

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

Levi Strauss & Co. stockholders’ equity

 

 

 

 

Common stock — $0.001 par value; 1,200,000,000 Class A shares authorized, 80,774,783 shares and 74,352,481 shares issued and outstanding as of February 28, 2021 and November 29, 2020, respectively; and 422,000,000 Class B shares authorized, 319,050,011 shares and 323,547,674 shares issued and outstanding, as of February 28, 2021 and November 29, 2020, respectively

 

400

 

 

398

 

Additional paid-in capital

 

609,068

 

 

626,243

 

Accumulated other comprehensive loss

 

(443,276

 

(441,446

Retained earnings

 

1,240,792

 

 

1,114,280

 

Total stockholders’ equity

 

1,406,984

 

 

1,299,475

 

Total liabilities and stockholders’ equity

 

$

6,236,194

 

 

$

5,641,241

 

The notes accompanying the consolidated financial statements in the company's Form 10-Q for the first quarter of fiscal 2021 are an integral part of these consolidated financial statements.

LEVI STRAUSS & CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

Three Months Ended

 

 

February 28,
2021

 

February 23,
2020

 

 

 

 

 

 

 

(Dollars in thousands, except per share amounts)

(Unaudited)

Net revenues

 

$

1,305,602

 

 

$

1,506,126

 

Cost of goods sold

 

545,573

 

 

666,799

 

Gross profit

 

760,029

 

 

839,327

 

Selling, general and administrative expenses

 

582,906

 

 

660,545

 

Operating income

 

177,123

 

 

178,782

 

Interest expense

 

(23,310

 

(16,654

Other income, net

 

858

 

 

2,700

 

Income before income taxes

 

154,671

 

 

164,828

 

Income tax expense

 

12,167

 

 

12,139

 

Net income

 

$

142,504

 

 

$

152,689

 

Earnings per common share attributable to common stockholders:

 

 

 

 

Basic

 

$

0.36

 

 

$

0.39

 

Diluted

 

$

0.35

 

 

$

0.37

 

Weighted-average common shares outstanding:

 

 

 

 

Basic

 

399,541,735

 

 

396,216,057

 

Diluted

 

411,872,771

 

 

410,068,373

 

The notes accompanying the consolidated financial statements in the company's Form 10-Q for the first quarter of fiscal 2021 are an integral part of these consolidated financial statements.

LEVI STRAUSS & CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

Three Months Ended

 

 

February 28,
2021

 

February 23,
2020

 

 

 

 

 

 

 

(Dollars in thousands)

(Unaudited)

Net income

 

$

142,504

 

 

$

152,689

 

Other comprehensive income, before related income taxes:

 

 

 

 

Pension and postretirement benefits

 

2,938

 

 

3,591

 

Derivative instruments

 

(17,315

 

15,405

 

Foreign currency translation gains (losses)

 

10,941

 

 

(8,133

Unrealized gains on marketable securities

 

401

 

 

1,556

 

Total other comprehensive (loss) income, before related income taxes

 

(3,035

 

12,419

 

Income taxes expense related to items of other comprehensive income

 

1,203

 

 

(5,723

Comprehensive income, net of income taxes

 

$

140,672

 

 

$

159,385

 

The notes accompanying the consolidated financial statements in the company's Form 10-Q for the first quarter of fiscal 2021 are an integral part of these consolidated financial statements.

LEVI STRAUSS & CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

 

 

 

Three Months Ended February 28, 2021

 

 

Levi Strauss & Co. Stockholders

 

 

 

 

 

 

Class A

 

 

 

 

 

 

Accumulated

 

 

 

 

& Class B

 

 

Additional

 

 

 

Other

 

 

 

Total

Common

 

 

Paid-In

 

Retained

 

Comprehensive

 

Noncontrolling

 

Stockholders'

 

 

Stock

 

 

Capital

 

Earnings

 

Loss

 

Interest

 

Equity

 

 

(Dollars in thousands)

(Unaudited)

Balance at November 29, 2020

  $

398

 

 

$

626,243

 

$

1,114,280

 

$

(441,446

)

 

$

 

 

$

1,299,475

 

Net income

 

 

 

 

142,504

 

 

 

 

 

 

 

 

142,504

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

(1,830

)

 

 

 

 

 

(1,830

)

Stock-based compensation and dividends, net

 

2

 

 

6,714

 

 

 

 

 

 

 

 

 

6,716

 

Employee stock purchase plan

 

 

 

1,929

 

 

 

 

 

 

 

 

 

1,929

 

Shares surrendered for tax withholdings on equity awards

 

 

 

(25,818

)

 

 

 

 

 

 

 

 

 

(25,818

)

Cash dividends declared ($0.04 per share)

 

 

 

 

(15,992

)

 

 

 

 

 

 

 

 

(15,992

)

Balance at February 28, 2021

  $

400

 

 

$

609,068

 

$

1,240,792

 

$

(443,276

)

 

$

 

 

$

1,406,984

 

             

 

 

Three Months Ended February 23, 2020

 

 

Levi Strauss & Co. Stockholders

 

 

 

 

Class A

 

 

 

 

 

 

Accumulated

 

 

 

 

& Class B

 

 

Additional

 

 

 

Other

 

 

 

Total

Common

 

 

Paid-In

 

Retained

 

Comprehensive

 

Noncontrolling

 

Stockholders'

Stock

 

 

Capital

 

Earnings

 

Loss

 

Interest

 

Equity

 

 

(Dollars in thousands)

(Unaudited)

Balance at November 24, 2019

 

$

394

 

 

$

657,659

 

 

$

1,310,464

 

 

$

(404,986

)

 

$

8,026

 

$

1,571,557

Net income

 

 

 

 

 

 

 

 

152,689

 

 

 

 

152,689

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

6,696

 

 

6,696

Stock-based compensation and dividends, net

 

 

5

 

 

 

17,530

 

 

 

 

 

 

 

17,535

Employee stock purchase plan

 

 

 

 

 

2,030

 

 

 

 

 

 

 

2,030

Repurchase of common stock

 

 

 

 

 

 

 

 

(37,071

)

 

 

 

(37,071

)

Shares surrendered for tax withholdings on equity awards

 

 

 

 

 

(75,243

)

 

 

 

 

 

 

(75,243

)

Changes in ownership of noncontrolling interest

 

 

 

 

 

 

 

 

(8,672

)

 

 

(8,026

)

 

(16,698

)

Cumulative effect of the adoption of new accounting standards

 

 

 

 

 

 

 

 

59,708

 

 

(54,444

)

 

 

5,264

Cash dividends declared ($0.08 per share)

 

 

 

 

 

 

 

 

(31,930

)

 

 

 

(31,930

)

Balance at February 23, 2020

 

$

399

 

 

$

601,976

 

 

$

1,445,188

 

 

$

(452,734

)

 

$

 

$
Levi Strauss & Co.

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Hosiery and Sock Mills
Manufacturing
Link
Apparel/Footwear, Consumer Non-Durables, Manufacturing, Hosiery and Sock Mills
US
San Francisco

About LEVI

levis outlet is a company based out of 114 s avenue, minneapolis, minnesota, united states.

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