Levi's profits slide 50%

American denim giant Levi Strauss & Co. reported a 50.5% profit loss for the first quarter. The San Francisco-based retailer saw earnings fall 50.5 percent to $48.1 million for the three months ended March 1, compared with earnings of $97.1 million during the same period a year ago.

Overall revenues fell 12.1 percent to $951.5 million from $1.08 billion, including sales that slid 12.2 percent to $931.3 million from $1.06 billion and licensing revenue that fell 7.9 percent to $20.2 million from $21.9 million. Levi's-branded products accounted for 78 percent of sales during the quarter, or $726.4 million, compared with 76 percent of sales a year ago.

"We knew that 2009 would be tough and our first-quarter results reflect those expectations," said John Anderson, president and chief executive officer, during a conference call with analysts.The bulk of losses was concentrated in the European and Americas markets, where global economic turmoil has spurred retail bankruptcies and a drastic pullback in consumer spending. Results were also heavily impacted by the strength of the U.S. dollar. Revenues for the Americas market, which includes the U.S., Canada, Mexico and Latin America, fell 13.1 percent to $503.9 million from $579.8 million.

The decline was mostly due to the bankruptcies of Mervyns and Goody's Family Clothing, Inc., two large retail outlets for of Levi's. The company is expectinga challenging 2009, as customers hang on to their old jeans and put off buying a new pair. European sales were also down, but Asia-Pacific regional revenues sales were actually up 3.4%.

Image: Levi's campaign