For the third quarter, Levi Strauss net revenues of 1.5 billion dollars were flat on a reported basis, and 2 percent higher on a constant-currency basis.

Levi Strauss announced that it has initiated a formal review of strategic alternatives for the Dockers brand, which could include a potential sale or other strategic transaction.

The company’s net income rose to 21 million dollars and adjusted net income to 132 million dollars. Diluted earnings per share were 5 cents compared to 2 cents and adjusted diluted earnings per share were 33 cents compared to 28 cents in the third quarter of 2023.

“The underlying fundamentals of our business are getting stronger, driven by the Levi’s brand, which grew 5 percent globally in Q3, a significant acceleration from H1 and the highest revenue growth in two years,” said Michelle Gass, president and CEO of Levi Strauss & Co. 

Levi’s brand revenues grow by 5 percent in Q3

The company said in a statement that Levi’s brand was up 5 percent globally. In the Americas, net revenues decreased 1 percent on a reported basis and were flat on a constant-currency basis.

In Europe, net revenues increased 6 percent on a reported basis and 7 percent on a constant-currency basis, reflecting positive growth across a majority of markets and in both channels.

Asia net revenues were roughly in line with prior year on a reported basis and up 4 percent on a constant currency basis.

Other brands' net revenues decreased 7 percent on a reported basis and 5 percent on a constant-currency basis. Dockers decreased 15 percent on a reported basis and 13 percent on a constant-currency basis. Beyond Yoga increased 19 percent on a reported and constant-currency basis.

DTC net revenues increased 10 percent on a reported basis and 12 percent on a constant currency basis. DTC growth reflected a 12 percent increase in the US and a 9 percent increase in Europe. Net revenues from e-commerce grew 16 percent on a reported basis and 18 percent on a constant-currency basis. Wholesale net revenues decreased 6 percent on a reported basis and 5 percent on a constant-currency basis.

Operating margin was 2 percent compared to 2.3 percent in the third quarter of 2023, adjusted EBIT margin increased 250 basis points to 11.6 percent, and gross margin increased 440 basis points to 60 percent.

Levi Strauss expects FY25 revenues to grow between 1.5 to 2 percent

The company returned approximately 69 million dollars to shareholders in the third quarter, a 45 percent increase over prior year, including dividends of 52 million dollars, representing a dividend of 13 cents per share and ahare repurchases of 18 million dollars, reflecting 1 million shares retired.

For fiscal 2024, the company added that reported net revenues are expected to grow approximately 1 percent, and constant-currency net revenues are expected to grow 1.5 percent to 2 percent.

The company expects adjusted diluted EPS to be at the midpoint of the previously guided range of 1.17 dollars to 1.27 dollars.

"We are taking decisive actions to address the areas where we’ve underperformed, including our decision to evaluate strategic alternatives for Dockers. We remain confident in our ability to drive long-term shareholder value,” added Harmit Singh, chief financial and growth officer of Levi Strauss & Co.