On Tuesday, we reported our Q1 financial results and provided an update on the steps that LS&Co is taking to navigate the coronavirus pandemic. While our Q1 financial results were strong overall, the effects of the global outbreak will continue to reverberate throughout our business for the foreseeable future.
“Our first quarter results underscore the strength of the Levi’s brand and the efficacy of our strategies to diversify our business, both of which will be crucial to coming out of the current crisis stronger than ever,” said Chip Bergh, president and chief executive officer of Levi Strauss & Co. “This company has endured for 167 years and successfully made it through everything from two world wars, the Great Depression, earthquakes, fires and the 1918 Flu Pandemic, all while remaining true to our values. I believe the true character of a company is shown in a time of crisis, and as we have in the past, we will navigate this one by leveraging our strengths and seizing opportunities that will help us continue to thrive over the long-term.”
Navigating COVID-19 as a business
As Chip said, we have faced many challenges in our history, and we will continue to navigate difficult times as we always have—by managing this business for the long term while staying true to our values and taking care of our people as best as we can. With that in mind, we also announced this week additional steps we are taking as a business to address the impact of COVID-19, including executive-level salary cuts – which is a 50 percent salary cut for Chip — and furloughs of all U.S. hourly retail employees and our wholesale merchandise coordinators, effective Monday, April 13. While a difficult decision, the structure of the furlough was done intentionally to allow employees to remain legally employed by LS&Co. and continue their access to unemployment insurance, benefits, including our Employee Assistance Program (EAP), and emergency financial assistance provided by the Red Tab Foundation.
We have also implemented additional cost-cutting measures, including instituting a hiring and travel freeze, deferring non-essential projects, pausing new production in the supply chain, renegotiating leases, and cutting back on advertising and promotions. We are strictly adhering to our top priorities in coming months; deferring some store openings and certain projects; and prudently cutting business costs in view of the current environment.
We know there are hard times ahead and we will continue to face difficult decisions as a business. But we are doing everything we can to do right by our people and to be thoughtful in our policies and practices while also putting ourselves in a position to emerge from this crisis as a strong business for the long term.