On Tuesday, we announced our Q3 2020 earnings, and while our business continues to be heavily impacted by the pandemic, we outperformed our own expectations and are seeing a faster recovery than we had anticipated.
Revenues were $1.1 billion, down 27% on a reported basis due to the impact of reduced traffic and ongoing store closures in some parts of the world. However, our digital business continues to see outsized growth and momentum and we are focusing on the areas that will enable us to emerge from the COVID-19 crisis a stronger, more agile company.
“As we continue to navigate the COVID-19 pandemic and its impact, we are laser focused on the areas that will drive value and enable us to emerge stronger on the other side, including elevating our already iconic brand, investing in digitization, and accelerating our efforts to diversify across geographies, product categories and distribution channels, including doubling down on our fast-growing direct-to-consumer business,” said Chip Bergh, president and chief executive officer of Levi Strauss & Co. “These investments are already paying off- we exceeded our expectations for the third quarter, our total digital business has doubled as a share of total net revenues, and Levi’s remains the global leader in denim, where our women’s business continues to take market share. And the brand has gotten even stronger during the pandemic.”
Here’s a look at the three areas we are focused on to drive long-term success:
- Elevating our brand. We continue to strengthen our brand through our product, marketing, and stores. We are staying connected to our fans and leaning into our values on a number of topics that matter in this moment, including engaging voters in the upcoming U.S. election. We are also bringing our sustainability efforts to the forefront with marketing campaigns and with yesterday’s launch of Levi’s® SecondHand, an online site for consumers to purchase previously-loved Levi’s® directly from us.
- Accelerating our digital transformation. We continue to accelerate our digitization efforts and are leveraging the use of data, analytics and machine learning in more aspects of our business. Our digital business was a standout from the quarter. Company e-commerce revenue grew 52% on a reported basis, while the company’s global digital revenues, which includes the company’s e-commerce sites as well as the online business of our wholesale partners, grew approximately 50% compared to the same period in the prior year.
- Further diversifying our business, with an increased focus on Direct-To-Consumer. We continue to diversify our business across geographies, distribution channels and product categories. Our total year-to-date revenue from our international business reached nearly 60%, our DTC business reached around 40%, women’s has grown to more than a third, and tops now represents almost a quarter of our revenue. Our women’s business has been a standout, with women’s bottoms delivering half of the total Levi.com growth for the quarter.
We are also becoming a more DTC-led company, accelerating investments in both ecommerce and stores. Our new NextGen stores are elevating the brand and offers a digitally enabled, immersive experience for consumers. In wholesale, we continue to expand our distribution with partners like Dick’s Sporting Goods.
There is still a great deal of uncertainty ahead, but we are executing on our strategies and this quarter’s results show we are on a path to achieve long-term success and emerge a stronger company.
For our full results from the quarter, visit our Investors site.
