Oct 9, 2009
Levi Strauss profit down on currency, weak sales
Oct 9, 2009
By Alexandria Sage
SAN FRANCISCO (Reuters) - Levi Strauss & Co posted a 41 percent drop in quarterly net profit on Thursday 8 October, hurt by currency fluctuations and lower revenue, but the company said sales of its Levi's brand improved, particularly in the United States.
Levi's and Jean Paul Gaultier - Photo : Pixel Formula
The net profit from the maker of the iconic 501 jeans brand fell to $40.7 million in its third quarter ended August 30, compared with $69.2 million a year earlier, the company said.
Net revenue fell about 6 percent to $1.04 billion. Some $51 million of that was due to an unfavorable currency impact, particularly in Europe. On a constant currency basis, net revenue fell 2 percent.
"There's no question, we're in tough times," Chief Executive John Anderson told analysts on a call, adding that the Levi's brand was nevertheless showing solid growth.
Still, he said the company remained cautious in advance of the holiday season.
"There's no early indication that the holiday is going to be a booming period," Anderson told Reuters. "We think everyone is going to be cautious."
In the Americas region, which includes the home market of the United States, sales fell 5 percent. They fell 13 percent in Europe and rose 2 percent in the Asia Pacific region.
Global sales from the Levi's brand rose, when adjusting for currency fluctuations, compared with the year-ago period.
Levi Strauss, a major supplier to department stores and mass-market retailers, has seen softer sales and lower profit in recent quarters as its retail customers have cut orders due to tight spending by consumers.
The company has been expanding its retail operations worldwide even as it has cut back on advertising, distribution and other costs.
In July, Levi Strauss acquired 73 Levi's and Dockers outlet stores owned by a licensee, as well as its main footwear and accessories licensee for Europe and some of Asia, DC Company.
San Francisco-based Levi Strauss is a private company but releases quarterly results due to its publicly-held debt.
Net debt at quarter's end was at $1.7 billion, down from $1.8 billion a year ago, Levi said.
(Additional reporting by Aarthi Sivaraman in Seattle; Editing by Tim Dobbyn, Bernard Orr)
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