Levi Strauss has had one of the most successful IPOs of the year, but it’s going through a few growing pains as a newly minted public company.
Levi’s (LEVI) reported Tuesday that its profit during the second quarter of 2019 fell 63% from the same period a year ago.
The clothing company blamed that drop on elevated costs from its March IPO…
such as underwriting fees to banks. The company missed Wall Street’s estimates, sending its stock down 6% during after hours trading. Heading into Tuesday, Levi’s stock had climbed 9% over the past three months.
Levi’s makes close to half its sales in Europe and Asia. It believes it has a huge growth opportunity in China, which accounts for 20% of the global apparel market — but only 3% of Levi’s revenue.
“Our performance in China was positive, yet remains far from its potential,” CEO Chip Bergh said on a call with analysts Tuesday. “There’s still a lot of heavy lifting to do.”
Sales in Levi’s men’s business grew 6% during the quarter, while its women’s division increased 16%. Levi’s sees an opportunity to grow with women. Women’s sales made up 29% of Levi’s total revenue last year, up from 20% in 2015.
Levi’s got a lift from Coachella in April, too.
“We again dominated Coachella,” Bergh said. In 2018, Beyoncé wore Levi’s cutoff shorts on stage at Coachella, where her performance set the internet on fire
Bergh said Levi’s cutoff shorts were the “go-to uniform for festival season” and sales jumped 50% during the quarter.
The 166-year-old company, which invented the blue jean, first went public in 1971, but was taken private in…