Levi Strauss to furlong staff as profits decline

Levi Strauss plans to use the pandemic as an opportunity to come out stronger on the other side. It plans to furlough its retail store staff in the US. As its bricks-and-mortar stores across Europe and North America, in addition to other parts of the world, remain closed, Levi Strauss expects to take a materially significant hit during the second quarter of 2020.

The company recently reported its first-quarter 2020 results, for the period ended Feb. 23. However, COVID-19 outbreak that started in China roughly during the middle of the quarter hit the period’s net revenue in Asia by about USD 20 million.

The company reported net income of USD 153 million, or 37 cents per share, compared with USD 147 million, or 37 cents a share, a year earlier. Its adjusted quarterly earnings were 40 cents per share, 5 cents better than analysts were expecting, based on Refinitiv data. Revenue rose to USD 1.51 billion from USD 1.44 billion a year ago, better than the USD 1.47 billion analysts were anticipating.

The brand has reopened all its stores in Mainland China after the lockdown to stop the spread of Coronavirus, including its biggest China location in Wuhan, where the virus emerged. Traffic there is still below year-ago levels, but is progressing week by week, according to Bergh. E-commerce remains strong, he said.