Levi’s is grappling with many of the pressures seen across apparel retail, including economic volatility and soft consumer demand, but its 43% inventory growth in the third quarter stood out to many analysts.
A third of the year-over-year surge was due to inflation and a rise from 2021’s “abnormally low inventory level,” another third from early orders to defend against supply chain troubles, and the final third from “an increase of goods in transit,” CFO Harmit Singh told analysts on a Friday conference call, per a Seeking Alpha transcript.
To clear inventory, the denim maker cut its Q1 receipts by 25% and will institute heavier markdowns, and it expects levels to normalize by the second quarter next year, Singh said.
Source: Retail Dive
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