Levi Strauss considers sale of Dockers brand
Levi Strauss & Co. may put its ailing Dockers brand on the selling block.
The denim giant reported a mixed third quarter and said it has initiated a formal review of strategic alternatives for the Dockers brand, which could include a potential sale or other strategic transaction. It has retained Bank of America as its financial advisor.
“This is all about focus,” CEO Michelle Gass said on Levi’s earnings call. “Our intention going forward is to really amplify our focus on the Levi’s brand and accelerate Beyond Yoga.”
Levi’s reported net income $20.7 million, or $0.05 per share, for the quarter ended Aug. 25, compared with $9.6 million, or $0.02 per share, in the year-ago period. Adjusted earnings were $0.33 per share, ahead of analysts’ estimates of $0.31 per share.
Levi's third-quarter sales inched up to $1.52 billion from $1.51 billion a year earlier. Direct-to-consumer net revenues increased 10% on a reported basis. DTC growth reflected a 12% increase in the U.S. and a 9% increase in Europe. Overall, direct sales comprised 44% of Levi’s total revenue.
By brand, sales at Levi’s rose 5%, the biggest revenue growth in two years. Sales at Beyond Yoga, which Levi’s acquired in 2021, surged 19% to $32.2 million. Sales at Dockers fell 15% to $73.7 million.
“The underlying fundamentals of our business are getting stronger, driven by the Levi’s brand,” said Gass in the earnings release. “We are making progress against our strategic priorities, including double-digit growth in our direct-to-consumer business, continued positive performance in the U.S., and Europe inflecting to growth. Looking to Q4 and beyond, we will amplify our focus on the Levi’s brand, exemplified by our new campaign with Beyoncé and an innovative product pipeline designed to build momentum with our fans around the world.”
Levi’s announced the global campaign with Beyoncé earlier this week. The superstar’s most recent album “Cowboy Carter,” has a song named “Levii’s Jeans.
“The Levi’s brand has and always will be the unofficial uniform for those moving forward in the pursuit of better,” said Kenny Mitchell, global chief marketing officer of the Levi’s® brand at Levi Strauss & Co. “We believe a key part of that is continuously breaking and building the codes of culture. In collaboration with Beyoncé, we explore the power of reimagination through this campaign, helping us to connect with our fans in new ways and supporting the growth of our women’s business as the definitive denim lifestyle brand.”
Levi’s has a global footprint of approximately 3,400 brand-dedicated stores and shop-in-shops. Its products are also sold in more than 110 countries worldwide through a combination of chain retailers, department stores and online sites.
