Levi's Inventory Surges 43% in Q3, But Net Revenue Rises 1%
Levi Strauss & Co. has witnessed a significant 43% increase in inventory during the third quarter, a growth that surpasses many other retailers, as per Morgan Stanley analysts. This substantial rise follows increases of 29% in the second quarter and 20% in the first quarter.
Despite the inventory growth, Levi's net revenue climbed by 1% year over year to $1.5 billion in the third quarter. The company's global digital net revenue also grew by 9% and represented 21% of total net revenue during this period.
To manage the inventory, Levi's reduced its Q1 receipts by 25% and anticipates inventory levels to normalize by the second quarter of next year. The inventory growth was attributed to several factors: an increase of goods in transit, early orders to circumvent supply chain issues, and inflation, which elevated inventory levels from the low point in 2021.
Levi's inventory growth, while substantial, is being addressed by the company. Despite the inventory challenges, Levi's net revenue and digital sales have demonstrated growth. Looking ahead, the company aims to normalize inventory levels by the second quarter of next year.
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