Denim Maker Levi Strauss & Co.’s sales dropped 62% during their second quarter as the company announced on Tuesday as online sales did not make up the financial gap as the physical stores are temporarily shut-off due to the ongoing pandemic. Consumer base has by large shifted away from the tight pants and denim, instead of opting for loungewear and pants with elastic waistbands to wear around the house – An ongoing trend indicated.
Levi also announced that they will be slashing 15% of their global corporate workforce that will impact around 700 jobs in an attempt to cut costs during the coronavirus pandemic. The following move is said to save Levi a cash influx of $100 million. Levi’s shares also fell after-hours trading however they recently picked up by less than 1% during the intra-trading hours.
“Although we are starting to see some green shoots, we need to continue to be cautious,” Chief Executive Chip Bergh said in a memo sent to the company’s employees, which was obtained by CNBC. “There could be a second wave,” of Covid-19 cases and resulting store closures, he added.
Bergh’s comments come as cases in the states have reached 3 million and many government officials and local government bodies are slowing reopening or reimposing social distancing guidelines in an attempt to slow the spread of the coronavirus. Overall retail store traffic declines have been increased again in the past two week, according to data that has been received from ShopperTrak.
However, at the time of writing, 90% of Levi’s physical stores have been reopened worldwide and considering the traffic and sales which are lagging for the previous quarter, Bergh believes that it will likely take some time for Levi to recoup.
Revenue for Levi was stuck at $498 million during the last quarter while the adjusted loss per share was quoted at 48 cents.