- Levi’s sales tank 62% as COVID-19 shuts stores in the second quarter.
- The clothing company to cut its global corporate workforce by 15%.
- The U.S. company boasts £1.60 billion of liquidity at the end of Q2.
Levi Strauss & Co. (NYSE: LEVI) released its quarterly financial results on Tuesday that highlighted a massive 62% decline in its sales in the fiscal second quarter. The company attributed the decline to the Coronavirus pandemic that temporarily closed its countrywide stores in recent month. Levi’s settled its dispute with garment workers last week.
Shares of the company tanked 5% in extended trading on Tuesday. The £4.38 billion company that has a price to earnings ratio of 14.19 is roughly 30% down year to date in the stock market. Learn more about how can you start trading on the stock market.
Levi’s to cut its global corporate workforce by 15%
The denim maker also said on Tuesday that it plans on cutting its global corporate workforce by 15%. The layoff that is aimed at cushioning the economic blow from COVID-19 will affect roughly 700 jobs and is expected to save about £80 million for the company annually.
Levi’s said that it had reopened around 90% of its global stores for the public, but sales and traffic at large remained under pressure as COVID-19 cases continue to rise.
According to Refinitiv, experts had forecast the company to print £388 million in revenue in the quarter that ended on 24th May. Their estimate for adjusted loss per share was capped at 39.12 pence. In its report on Tuesday, however, the American clothing company topped both estimates posting a higher £397.59 million in revenue and a marginally lower 38.32 pence of adjusted loss per share in the second quarter.
Levi’s boasts £1.60 billion of liquidity at the end of Q2
At £290.61 million, Levi’s net loss in Q2 came in significantly weaker than £23.15 million of net income in the same quarter last year. The company attributed its loss to the pandemic that resulted in £193.21 million in restructuring and inventory-related costs. Its inventories were up 10% at the end of Q2. On a year over year basis, Levi’s revenue was reported 62% down.
Digital sales, Levi’s added partially offset the decline registering a 25% growth in Q2. E-commerce now accounted for 15% of its total quarterly net revenue versus 5% last year. All in all, however, sales were down by 59% in the Americas, 61% in Asia, and 68% in Europe.
Levi’s said that it concluded the recent quarter with £1.60 billion of liquidity. The San Francisco-based company still access to £357.67 million under its revolving credit facility. Citing the rising COVID-19 uncertainty, Levi’s refrained from giving its full-year financial guidance for fiscal 2020.