SAN FRANCISCO, California: Levi Strauss and Co. has increased its financial targets for the next five years while maintaining its full year outlook.
In an interview ahead of Levi’s annual investor day event, Chief Financial Officer Harmit Singh said, “We are reaffirming full-year guidance, despite all the headwinds. The trends we are seeing in the business give us confidence. We are looking at the short term, while also not losing sight of the long-term,” as reported by CNBC.
Meanwhile, other retailers such as Walmart and Abercrombie and Fitch, have highlighted their recent challenges, including ongoing supply chain problems, unbalanced inventories, inflation and a drop in consumer spending.
According to retail executives, while wealthier consumers are splurging on new outfits, makeup and luggage for summer travel, lower-income shoppers are already feeling the effects of higher prices and have adjusted their budgets, resulting in a similar divide in the retail industry.
Through 2027, Levi predicts its annual revenues would grow from 6 to 8 percent, up from previous targets of 4 to 6 percent, which will bring its revenue close to $10 billion in five years.
For the 2022 fiscal year, the company still expects sales to increase from 11 to 13 percent over 2021, and by 2027 it aims to expand its direct-to-consumer business to 55 percent of total sales and triple its e-commerce revenues.
According to an annual filing, Levi’s direct business accounted for about 36 percent of total sales in the latest fiscal year ending on 28th November, while its digital revenue, including from wholesale partners, accounted for 22 percent of total revenues, valued at $5.8 billion.
“As we continue to scale [e-commerce], that business becomes a lot more profitable. Before the pandemic, our e-commerce business was a money-loser,” said Chief Executive Officer Chip Bergh, as quoted by CNBC.