Levi Strauss & Co. Files Q3 2024 10-Q Report

TL;DR

Levi's Q3 10-Q is in. Check financials for latest performance.

AI Summary

Levi Strauss & Co. filed its 10-Q for the period ending August 25, 2024. The company's fiscal year ends on December 1st. Key financial data and reporting dates are included in this filing, which covers the third quarter of their fiscal year.

Why It Matters

This filing provides investors with the latest financial performance and operational details of Levi Strauss & Co., crucial for understanding the company's current health and future prospects.

Risk Assessment

Risk Level: low — This is a standard quarterly financial filing with no immediate red flags.

Key Numbers

• 1201 — Fiscal Year End (Indicates the end of the company's financial year.)
• 001-06631 — SEC File Number (Unique identifier for the company's SEC filings.)

Key Players & Entities

• LEVI STRAUSS & CO (company) — Filer
• 2024-08-25 (date) — Period of Report
• 2024-10-02 (date) — Filing Date
• 1155 BATTERY ST (address) — Business Address
• SAN FRANCISCO (location) — Business City
• DE (location) — State of Incorporation

FAQ

Key Financial Figures

• $0.001 — which registered Class A Common Stock, $0.001 par value per share LEVI New York Stock
• $6.1 million — d quarter of 2023, the Company recorded $6.1 million of impairment charges related to capita
• $3.7 million — certain technology projects, as well as $3.7 million of impairment related to other disconti

Filing Documents

• lvis-20240825.htm (10-Q) — 2200KB
• lvis08252024ex-311.htm (EX-31.1) — 9KB
• lvis08252024ex-312.htm (EX-31.2) — 9KB
• lvis08252024ex-321.htm (EX-32.1) — 7KB
• 0000094845-24-000058.txt ( ) — 9082KB
• lvis-20240825.xsd (EX-101.SCH) — 39KB
• lvis-20240825_cal.xml (EX-101.CAL) — 77KB
• lvis-20240825_def.xml (EX-101.DEF) — 263KB
• lvis-20240825_lab.xml (EX-101.LAB) — 606KB
• lvis-20240825_pre.xml (EX-101.PRE) — 443KB
• lvis-20240825_htm.xml (XML) — 1591KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Consolidated Financial Statements (unaudited)

Item 1. Consolidated Financial Statements (unaudited): Consolidated Balance Sheets as of August 25, 2024 and November 26, 2023 3 Consolidated Statements of Income for the Three and Nine Months Ended August 25, 2024 and August 27, 2023 4 Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended August 25, 2024 and August 27, 2023 5 Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended August 25, 2024 and August 27, 2023 6 Consolidated Statements of Cash Flows for the Nine Months Ended August 25, 2024 and August 27, 2023 8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 28

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 61

Controls and Procedures

Item 4. Controls and Procedures 61

— OTHER INFORMATION

PART II — OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 62

Risk Factors

Item 1A. Risk Factors 62

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 63

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 63

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 63

Other Information

Item 5. Other Information 63

Exhibits

Item 6. Exhibits 64 SIGNATURE 65 WHERE YOU CAN FIND MORE INFORMATION Investors and others should note that we announce material financial information to our investors using our corporate website, press releases, SEC filings and public conference calls and webcasts. We also use these channels and social media channels as a means of disclosing information about our company, products, planned financial and other announcements, attendance at upcoming investor and industry conferences and other matters, as well as for complying with our disclosure obligations under Regulation FD promulgated under the Securities Exchange Act of 1934, as amended. Our corporate website and social media channels can be found at: our Investor Relations page (http://investors.levistrauss.com); our Twitter account (https://twitter.com/LeviStraussCo); our company blog (https://www.levistrauss.com/unzipped-blog/); our Facebook page (https://www.facebook.com/levistraussco/); our LinkedIn page (https://www.linkedin.com/company/levi-strauss-&-co-); our Instagram page (https://www.instagram.com/levistraussco/); and our YouTube channel (https://www.youtube.com/user/levistraussvideo). The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels in addition to following our press releases, SEC filings and public conference calls and webcasts. This list may be updated from time to time. The information we post through these channels is not a part of this Quarterly Report. Table of Contents

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

CONSOLIDATED FINANCIAL STATEMENTS

Item 1. CONSOLIDATED FINANCIAL STATEMENTS LEVI STRAUSS & CO. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) August 25, 2024 November 26, 2023 (Dollars in millions) ASSETS Current Assets: Cash and cash equivalents $ 577.1 $ 398.8 Trade receivables, net 679.5 752.7 Inventories 1,275.2 1,290.1 Other current assets 213.7 196.0 Total current assets 2,745.5 2,637.6 Property, plant and equipment, net 699.1 680.7 Goodwill 280.8 303.7 Other intangible assets, net 198.4 267.6 Deferred tax assets, net 777.8 729.5 Operating lease right-of-use assets, net 1,103.0 1,033.9 Other non-current assets 448.9 400.6 Total assets $ 6,253.5 $ 6,053.6 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable 667.8 567.9 Accrued salaries, wages and employee benefits 209.6 214.9 Accrued sales returns and allowances 181.3 189.8 Short-term operating lease liabilities 254.2 245.5 Other accrued liabilities 633.2 569.4 Total current liabilities 1,946.1 1,787.5 Long-term debt 1,020.5 1,009.4 Long-term operating lease liabilities 969.9 913.1 Long-term employee related benefits and other liabilities 443.9 297.2 Total liabilities 4,380.4 4,007.2 Commitments and contingencies Stockholders' Equity: Common stock — $ 0.001 par value; 1,200,000,000 Class A shares authorized, 104,374,812 shares and 102,104,670 shares issued and outstanding as of August 25, 2024 and November 26, 2023, respectively; and 422,000,000 Class B shares authorized, 292,352,695 shares and 295,243,353 shares issued and outstanding, as of August 25, 2024 and November 26, 2023, respectively 0.4 0.4 Additional paid-in capital 720.0 686.7 Retained earnings 1,571.2 1,750.2 Accumulated other comprehensive loss ( 418.5 ) ( 390.9 ) Total stockholders' equity 1,873.1 2,046.4 Total liabilities and stockholders' equity $ 6,253.5 $ 6,053.6 The accompanying notes are an integral part of these consolidated financial statements. 3 Table of Contents LEVI STRAUSS & C

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTERLY PERIOD ENDED AUGUST 25, 2024 NOTE 1: SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Levi Strauss & Co. (the "Company") is one of the world's largest brand-name apparel companies. The Company designs, markets and sells – directly or through third parties and licensees – products that include jeans, casual and dress pants, tops, shorts, skirts, dresses, jackets, activewear, footwear and related accessories for men, women and children around the world under the Levi's , Levi Strauss Signature, Denizen , Dockers and Beyond Yoga brands. Basis of Presentation and Principles of Consolidation The interim consolidated financial statements of the Company and its wholly-owned and majority-owned foreign and domestic subsidiaries, including the notes, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC") applicable to interim period financial statements and do not include all of the information and disclosures required by generally accepted accounting principles in the United States ("U.S. GAAP") for complete financial statements. In the opinion of management, all adjustments necessary for a fair statement of the financial position and the results of operations for the periods presented have been included. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended November 26, 2023, included in the Company's 2023 Annual Report on Form 10-K. The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions have been eliminated. The results of operations for the three and nine months ended August 25, 2024 may not be indicative of the results to be expected for any other interim period or the year ending December 1, 2024. The Company's fiscal year ends on the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued) FOR THE QUARTERLY PERIOD ENDED AUGUST 25, 2024 payment is recognized on the consolidated balance sheets in "Other accrued liabilities" and "Long-term employee related benefits and other liabilities" and the proceeds are recorded as an operating activity in "Net change in operating assets and liabilities" on the consolidated statements of cash flows. On June 6, 2024, the Company entered into an agreement with a third party logistics provider to replace the Company's Canton, Mississippi distribution center with a new distribution center. The Company will maintain certain rights over the warehouse, and warehouse equipment and technologies resulting in an Operating lease right-of-use asset and lease liability of $ 30.6 million in "Operating lease right-of-use assets, net" and "Operating lease liabilities" balances and a Financing lease right-of-use asset and lease liability of $ 14.0 million in "Other non-current assets" and "Long-term employee related benefits and other liabilities" balances on the consolidated balance sheets. Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may be impaired. Impairment losses are measured and recorded for the excess of carrying value over its fair value, estimated based on expected future cash flows and other quantitative and qualitative factors. Property, plant and equipment, net includes accumulated depreciation of $ 1.4 billion and $ 1.3 billion as of August 25, 2024 and November 26, 2023, respectively. In the third quarter of 2024, the Company recorded $ 11.1 million of asset impairment charges related to technology projects discontinued in connection with Project Fuel, which were recorded in "Selling, general and administrative expenses" in the accompanying consolidated statements of income. The Company also recorded an impairment charge of $ 9.1 million re

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued) FOR THE QUARTERLY PERIOD ENDED AUGUST 25, 2024 Share Repurchases During the three and nine months ended August 25, 2024, the Company repurchased 1.0 million and 3.3 million shares for $ 17.8 million and $ 59.7 million, plus broker's commissions, respectively, in the open market. This equates to an average repurchase price of approximately $ 18.35 per share for the nine months ended August 25, 2024. During the nine months ended August 27, 2023, the Company repurchased 0.5 million shares for $ 8.1 million, plus broker's commissions, in the open market during the first quarter. This equates to an average repurchase price of approximately $ 17.97 per share. There were no shares repurchased in either the second or third quarters of 2023. The Company accounts for share repurchases by charging entirely to retained earnings the excess of the repurchase price over the repurchased Class A common stock's par value. All repurchased shares are retired and become authorized but unissued shares. The Company accrues for the shares purchased under the share repurchase plan based on the trade date. The Company may terminate or limit the share repurchase program at any time. Reclassification Certain amounts on the consolidated balance sheets, consolidated statements of income and statements of cash flows have been conformed to the August 25, 2024 presentation. Recently Issued Accounting Standards There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company's consolidated financial statements and footnote disclosures, from those disclosed in the 2023 Annual Report on Form 10-K. NOTE 2: GOODWILL AND OTHER INTANGIBLE ASSETS The changes in the carrying amount of goodwill by business segment for the nine months ended August 25, 2024 and August 27, 2023 were as follows: Nine Months Ended August 25, 2024 Americas Europe Asia Othe

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued) FOR THE QUARTERLY PERIOD ENDED AUGUST 25, 2024 Nine Months Ended August 27, 2023 Americas Europe Asia Other Brands (1) Total (Dollars in millions) Balance, November 27, 2022 Goodwill $ 229.5 $ 21.3 $ 2.9 $ 123.6 $ 377.3 Accumulated impairment losses — ( 11.6 ) — — ( 11.6 ) 229.5 9.7 2.9 123.6 365.7 Impairment losses (2) — — — ( 75.4 ) ( 75.4 ) Goodwill acquired during the year 1.1 7.3 — — 8.4 Foreign currency fluctuation 1.7 0.4 ( 0.1 ) — 2.0 Balance, August 27, 2023 Goodwill 232.3 29.0 2.8 123.6 387.7 Accumulated impairment losses — ( 11.6 ) — ( 75.4 ) ( 87.0 ) $ 232.3 $ 17.4 $ 2.8 $ 48.2 $ 300.7 _____________ (1) Comprised of the Beyond Yoga reporting unit goodwill only. (2) For the nine months ended August 27, 2023 the company recorded a Beyond Yoga goodwill noncash impairment charge of $ 75.4 million. During the third quarter of 2024, as part of the Company's annual review of the Beyond Yoga reporting unit, the Company elected to perform a single step quantitative impairment test on the goodwill and indefinite lived trademark intangible assigned to the Beyond Yoga reporting unit and performed impairment tests on the related customer relationship intangible assets. The Company engaged third-party valuation specialists and used industry accepted valuation models and criteria that were reviewed and approved by various levels of management. The Company assessed the fair value of the Beyond Yoga reporting unit as of the test date, May 27, 2024, using the discounted cash flow method under the income approach, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows. As a result of this assessment, we concluded that the carrying value of the Beyond Yoga reporting unit exceeded the estimated fair value by $ 36.3 million, which was recorded as a noncash impairment charge to goodwill. Prior to the assessment

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