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Levi’s profits drop

By FashionUnited

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Fashion

Iconic denim brand Levi Strauss announced it’s financial results for its third-quarter 2010, and reported a lower net profit. The earnings went down with $13 milliondue to investments, but the 3Q net revenues grew 7% year-over-year on a reported basis.

Excluding the effects of currency, revenues grew 8%, and went up in all three regions.

Growth
was driven by the strength of the Lbrand in the Americas region, the company’s acquisitions in 2009, and the expansion ofthe company’s dedicated store network worldwide. Revenue declines in the wholesale channel in certain markets partially offset this growth. In comparison to the third quarter of 2009, operating income declined from $98 million to $86 million as the benefits from the increase in net revenues and higher gross margin were offset by continued investment in the company’s retail network and increased advertising and promotion activities.

   “Net revenue growth in the third quarter reflects the strength of the Levi’s brand around the globe in spite of a challenging retail environment,” said John Anderson, president and chief executive officer. “In the face of tough economic conditions, we achieved several key milestones in our overarching strategy to grow our business around the world. We realigned our management structure around our global brands, launched the Levi’s Curve ID fit system for women and began the roll-out of the new Denize brand in Asia. We’re investing in these global product initiatives to help us capitalize on growth opportunities when the global economy truly recovers.”

Higher net revenues in the Americas were primarily due to solid results in the wholesale channel, these improvements were partially offset by lower Dockers brand sales in the US. In Europe revenue dropped with 3% and went up by 11% in Asia Pacific. Overall, the operating income dropped with 12% due to rising administrative costs from $396 up to $457.

Image: Levi Strauss

Levi's
Levi Strauss