A month later, the CEO of California-based jeans maker Levi Strauss said Wednesday that it does not expect to reopen in Russia this year. Suspended operations There “temporarily” in response to Vladimir Putin’s invasion of Ukraine.

“As things stand now, I’m not optimistic that we will be back in full business soon,” Chipberg told the Financial Times, adding that its forecast now assumes no more revenue in 2022 from markets that contributed about 2% of sales last year.

Levi’s is still paying more than 800 employees in Russia and keeping several outlet stores open to “clear inventory,” but “every day I open the newspaper and it looks worse,” he said.

Conditions in Russia are “really tough” for Western companies, Berg said, noting that the authorities already have the power to nationalize the operations of businesses that stop supplying Russian customers.

“They could actually take our trademark,” he warned, echoing concerns privately expressed by other executives.

A Boston Consulting Group survey released this week found that two-thirds of investors expect it will take at least two years for Western companies to be willing to do business in Russia again, with 39 percent saying it will take five years or more.

However, few CEOs have publicly predicted how long they might be frozen out of the Russian market.

Despite the problems looming over Russia, Levi’s reiterated its full-year guidance after first-quarter revenue and earnings per share beat consensus estimates.

“We’ve grown the old-fashioned way, by generating a lot of demand and a lot of full-price sales,” Berger said, noting that revenue rose 22% to $1.59 billion in the three months to February, above the $1.55 billion Wall Street had expected. arrive.

A record operating margin rose to 14.7% from 13.3%, boosting adjusted earnings per share by more than a third to 46 cents, 4 cents ahead of estimates.

Levi’s raises average price by 10% in a year in attempt to ‘full’ offset inflationary pressureBerg pointed out.

“We are planning more [price rises] Later in the year, because we know costs will continue to rise,” he said, adding that running a business during the high inflationary years of the 1980s had taught him “you have to [inflation]because if you don’t, you can’t catch up.”

Chief Financial Officer Harmit Singh said Levi’s offset most of the higher cotton, transportation and wage costs by renegotiating leases and using its scale to reach better terms with suppliers.

Berger expressed confidence in the outlook for U.S. consumer demand, saying: “Despite the pandemic, we’ve been through everything, even though consumers are seeing inflation in Gas station And grocery stores, confidence levels remain high. “

Having said that, he added that the fact that full-year guidance was maintained after beating expectations in the first quarter “suggests that we may expect a slightly weaker second half”.