Levi Strauss reports 2 percent rise in FY 2013 revenues
By FashionUnited
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“Overall, we are pleased with the progress we made in 2013. We grew the top- and bottom-line, generated significant cash from operations and further strengthened the balance sheet by reducing our debt,” opined Chip Bergh, President and Chief Executive Officer, adding, “In 2014 we will continue to focus on growing the business over the long term by driving our profitable core business, addressing key opportunities to build a more balanced portfolio, and improving our retail operations, while at the same time reducing our controllable costs.”
Gross profit for the fiscal year 2013 was 2,351 million dollars compared with 2,199 million dollars in 2012. Gross margin improved to 50 percent of revenues in 2013 compared to 48 percent in 2012. Gross margin improved primarily due to the benefit of the lower cost of cotton in the products the San Francisco-based company sold in the first half of 2013. Gross margin also improved due to favorable currency effects of approximately 25 million dollars, and an unfavorable impact of approximately 32 million dollars in customer support and markdown charges taken in 2012 to exit the Denizen brand in Asia Pacific. Operating income for 2013 was 466 million dollars compared to 334 million dollars the prior year.
In the Americas, the net revenues increase was driven by higher Levi’s brand and Dockers brand men’s wholesale revenues, partially offset by the decline in wholesale revenues from the Levi’s brand women’s business. Retail sales were down compared to the prior year due to the timing of the Black Friday week in 2013. Net revenues in Europe reflected declining sales to traditional wholesale channels and franchisees. The net revenues increase in Asia Pacific primarily reflected promotional activity and the launch of the Levi’s brand Revel collection. Underlying retail conditions in most markets in the region remain challenging. The increase in operating income reflected the phase-out of Denizen in the region.