Levi Strauss sees leverage rise after free cash flow forces ABL draw

By Devika Patel

Knoxville, Tenn., April 6 – Levi Strauss & Co.’s management is pleased with the company’s 1.4x leverage ratio as of Feb. 26, despite the number creeping upwards from 1.1x at the end of the first quarter of fiscal 2022.

Leverage increased due to the company borrowing debt under its revolver to meet cash obligations, since adjusted free cash flow during the first quarter of fiscal 2023 came in at negative $272 million.

“As a result of this, we used our revolver to support our cash position,” chief financial officer Harmit Singh said on the company’s first quarter ended Feb. 26 earnings conference call on Thursday.

“As we sequentially improve our inventory through the year, we expect free cash flow to turn positive, enabling us to pay back our ABL draw.

“Our leverage ratio remained strong, although it did increase to 1.4x compared to 1.1x at the end of Q1 2022 due to our negative free cash flow,” he said.

Total liquidity was approximately $1.2 billion at quarter-end.

Cash and cash equivalents were $321.8 million as of Feb. 26, 2023, compared to $429.6 million as of Nov. 27, 2022.

Long-term debt was $993.6 million as of Feb. 26, 2023, compared to $984.5 million as of Nov. 27, 2022.

Short-term debt was $162 million as of Feb. 26, 2023, compared to $11.7 million as of Nov. 27, 2022.

As of, the company’s leverage ratio was 1.4x, compared to 1.1x at the end of the first quarter of fiscal 2022.

Levi Strauss is a San Francisco-based clothing company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.