The Levi Strauss & Co. machine rolled on in the third quarter.
“Fundamentally, our strategies are working,” said Chip Bergh, president and chief executive officer, in an interview with WWD. “The investments that we’ve made over the last couple years, they’re returning.”
Bergh, a veteran of Procter & Gamble Co., took the reins at Levi’s in 2011 and set the company on a path to grow its profitable core business, expand from there with, for instance, women’s tops, and then developing the chops of a world-class click and brick retailer.
The approach has worked.
Levi’s third-quarter net income shot up 48 percent $130.1 million from $88 million a year ago as net revenues increased 9.9 percent to $1.39 billion from $1.27 billion.
That’s the company’s fourth-consecutive quarter of double-digit revenue growth and a sign of just how far the company has come. Levi’s is on track to top $5 billion in sales this year for the first time since 1999.
Third-quarter gross margins expanded to 53.2 percent of revenues, up from 51.8 percent as the company developed its direct-to-consumer business. Levi’s added 65 stores over the past year, for a total of 798, and also logged 8 percent growth in wholesale sales.
The growth has Levi’s not just charging forward, but adding to its rainy-day fund — its cash and equivalents tallied $613 million at the end of the quarter on Aug. 26. Together with the firm’s revolving credit facility, it has a total liquidity of $1.3 billion.