Levi Strauss (NYSE: LEVI) entered fiscal 2020 on good footing, with constant-currency sales up 6% in fiscal 2019. While COVID-19 and the resulting store closures are setbacks for the classic jeans brand (which has been trying to overcome weakness in the U.S. wholesale channel), Levi's is on track to emerge from the crisis in a much stronger position thanks to stellar performance in e-commerce during the fiscal second quarter.
In earnings reported last week, Levi's said revenue declined 62% on a reported basis, and adjusted earnings per share plunged to a loss of $0.48. This was partially offset by growth in e-commerce of 25% in the quarter, with online sales accelerating each month to reach nearly 80% in May.
In a statement, CEO Chip Bergh explained, "The pandemic is accelerating retail landscape shifts and consumer behavior in ways that play to the strength of the Levi's brand." During the conference call, management laid out a strategy to double down on its digital transformation, which involves introducing same-day delivery. It's clear that not only is Levi's going to survive this crisis, it's paving the way to deliver more growth and expand margins through growing digital sales over the long term.