Levi Strauss & (LEVI) - 2025 Q1 - Quarterly Results

Financial Performance - Reported net revenues for Q1 2025 were $1.5 billion, up 3% year-over-year, with organic net revenues increasing by 9%[3] - The Levi's® brand saw an 8% increase in organic revenues globally, while DTC (Direct-to-Consumer) net revenues rose 12% on an organic basis[3] - For the three months ended March 2, 2025, net revenues increased to$ 1,526.8 million, up from $1,480.2 million in the same period last year, representing a growth of approximately 3.1%[28] - Total net revenues for the three months ended March 2, 2025, were$ 1,526.8 million, an increase of 3.1% compared to $1,480.2 million for the same period in 2024[72] - Total net revenues for the year ended December 1, 2024, reached$ 6,032.0 million, with the fourth quarter contributing $1,749.9 million[83] Profitability Metrics - Operating margin improved to 12.5%, with adjusted EBIT margin increasing by 400 basis points to 13.4% compared to Q1 2024[6] - Diluted earnings per share from continuing operations were$ 0.35, a significant increase from a loss of $0.03 in Q1 2024[6] - Adjusted net income for Q1 2025 was$ 150 million, up 49% from $100 million in Q1 2024[5] - Gross profit for the same period was$ 947.6 million, compared to $869.8 million, indicating a significant increase of about 8.9%[28] - Net income from continuing operations was$ 140.2 million, compared to a loss of $9.8 million in the previous year, marking a notable recovery[28] - Adjusted diluted earnings per share for the quarter were$ 0.34, compared to a loss of $0.03 per share in the same quarter last year[28] - Adjusted EBIT for the three months ended March 2, 2025, was$ 204.0 million, representing a 47.2% increase from $138.6 million in the prior year[78] - Net income for the three months ended March 2, 2025, was$ 135.0 million, compared to a net loss of $10.6 million for the same period in 2024, representing a significant turnaround[31] - The net income margin from continuing operations for the three months ended March 2, 2025, was 9.2%, compared to a negative margin of (0.7)% in the prior year[49] Shareholder Returns - The company returned approximately$ 81 million to shareholders in Q1 2025, a 12% increase over the prior year[8] - The company declared a dividend of $0.13 per share, totaling approximately$ 51 million, payable on May 9, 2025[9] - The company repurchased $30.0 million of common stock during the quarter, compared to$ 25.0 million in the same period last year, reflecting ongoing capital return strategies[31] Inventory and Assets - Total inventories increased by 7% on a dollar basis, with the majority secured for U.S. orders for Q2[12] - Total current assets decreased to $2,651.5 million from$ 2,851.1 million, a decline of approximately 7%[26] - Total liabilities decreased to $4,163.7 million from$ 4,405.0 million, indicating a reduction of about 5.5%[26] - The company’s cash and cash equivalents were reported at $574.4 million, down from$ 690.0 million, a decrease of approximately 16.8%[26] - Inventories decreased to $1,073.2 million from$ 1,131.3 million, reflecting a reduction of about 5.1%[26] Tax and Expenses - The effective income tax rate for Q1 2025 was 20.6%, compared to 15.9% in Q1 2024[6] - The effective income tax expense for Q1 2025 was $36.4 million, compared to a tax benefit of$ 1.9 million in Q1 2024, highlighting changes in tax obligations[42] - Adjusted SG&A expenses for Q1 2025 were $743.6 million, a slight increase from$ 731.2 million in Q1 2024, with an adjusted SG&A margin of 48.7% compared to 49.4% in the prior year[37] Restructuring and Charges - The company is focusing on restructuring operations to achieve anticipated cost savings, although specific figures were not disclosed[18] - Goodwill impairment charges for Q1 2025 were $2.5 million, down from$ 5.5 million in Q1 2024, reflecting improved asset valuations[37] - Restructuring charges for Q1 2025 amounted to $6.7 million, significantly lower than$ 113.1 million in Q1 2024, indicating progress in restructuring initiatives[44] - Restructuring charges for the year amounted to $185.6 million, with the highest charge in the first quarter at$ 113.1 million[83] Market Performance - Organic net revenues increased by 8.6% to $1,524.5 million from$ 1,404.1 million year-over-year[72] - Organic net revenues in the Americas grew by 11.1% to $780.7 million, while Europe saw a modest increase of 2.9% to$ 400.5 million[72] - The DTC (Direct-to-Consumer) channel reported organic net revenues of $787.5 million, a 12.5% increase from$ 700.0 million in the prior year[74] - The Levi's brand generated organic net revenues of $1,432.8 million, an increase of 8.2% compared to$ 1,324.5 million in the previous year[76] Discontinued Operations - The company is in the process of selling its Dockers® business, which has been classified as discontinued operations as of March 2, 2025[82] - Discontinued operations generated net revenues of $323.3 million for the year, with the fourth quarter contributing$ 89.8 million[84]