Where the pandemic has weighed down on Levi Strauss & Co’s revenue, it has propped up an emerging part of the longtime denim company.
Despite a double-digit drop in revenue in the third quarter, Levi’s managed to not only turn a profit but also make its e-commerce business profitable, CEO Chip Bergh told CNBC’s Jim Cramer Wednesday.
“We’re going to see e-commerce continue to grow,” he said in a “Mad Money” interview. “We’re profitable a year ahead of schedule, despite all of the accelerated investments that we’ve made.”
Levi’s total revenue plunged almost 27% during the three-month period ended Aug. 23, but some of the lost business was offset by 52% growth in the company’s e-commerce sales. E-commerce made up 8% of the apparel company’s $1.06 billion in revenues, double its rate from a year ago, Bergh said.
Seven in 10 of the shoppers on the jean maker’s website were first-time shoppers, he added.
The $1.06 billion that Levi brought in smashed the $822.2 million that Wall Street analysts expected. The company was also expected to turn in losses of 22 cents per share, but the company showed earnings of 8 cents per share. The profit was a reversal from when Levi recorded a loss during the early months of the pandemic.
Levi’s has invested heavily in both online and brick-and-mortar operations as the retailer looks to build up its direct-to-consumer services. The company also built out its omnichannel capabilities, which Bergh said has benefitted greatly from the pandemic environment.
“The pandemic has compressed what might have taken 5 or 10 years and it’s compressed it into a very, very short window, and I have to say the acceleration of our e-commerce business has been one of the beneficiaries of that,” he said.
Outside of the impact of coronavirus on