Levi Strauss & Co. quarterly profits take hit from IPO costs
By Huw Hughes
10 Jul 2019
Levi Strauss & Co. missed analysts' earnings expectations in the second quarter of the fiscal year, reporting on Tuesday a 5 percent increase in sales for the second quarter of the year, but a 63 percent drop in net income to 49 million dollars (about 39 million pounds).
The American denim specialist said the fall in income was primarily due to 29 million dollars (about 23 million pounds) worth of costs associated with the company's initial public offering (IPO) in March.
The company increased its sales in all three of its market regions: In America, net revenues grew three percent on a reported basis and four percent on a constant-currency basis; In Europe, net revenues grew nine percent on a reported basis and 18 percent on a constant-currency basis; and in Asia, net revenues grew six percent on a reported basis and 12 percent on a constant-currency basis.
Levi Strauss & Co. forecasts its full-year constant-currency net revenues growth to be at the high end of the mid-single digit range.
Commenting on the results in a statement, Chip Bergh, president and chief executive officer of Levi Strauss & Co., said: "Our second quarter and first half results reflect the continued strength of our diversified business model as we delivered broad-based growth across all brands, regions and key product categories despite a challenging retail and macroeconomic environment.
"For both periods, the Levi’s brand grew in all three regions across men’s, women’s, tops and bottoms and maintained its position at the center of culture through iconic products and consumer experiences."
Photo credit: Levi’s, Facebook