Levi's Q3 net revenues decline 9 percent
10 Oct 2012
In its third quarter results ended August 26, 2012, Levi's
announced that its net revenues declined 9 percent on a reported basis and 4 percent on a constant currency basis. These results reflect the ongoing global economic challenges and actions the company took to drive improvements in its future performance, including the decisions to license the Levi’s brand boys business in the Americas and phase out the Denizen brand in Asia. Despite the notable revenue decline, net income dropped only 4 million dollars (Rs 21 crores), reflecting an improved operating margin.
“While the third quarter was impacted by the continuing difficult global macro-economic environment, we are very focused on what we can control: our product innovation and marketing programs, the key strategic choices we make and addressing our underlying cost structure,” said Chip Bergh, president and chief executive officer of Levi Strauss & Co.
Gross profit in the third quarter declined to 521 million dollars (Rs 2,738 crores) compared with 569 million dollars (Rs 2,991 crores) for the same period in 2011, reflecting unfavourable impacts of 45 million dollars (Rs 237 crores) of currency effects and 25 million dollars (Rs 131 crores) associated with the company’s decision to phase out its Denizen brand in Asia. Third quarter gross margin of 47.3 percent was flat to prior year. Excluding the currency and Denizen impacts, gross margin improved, reflecting increased sales from the company’s retail stores, a decline in sales to lower-margin channels and lower cotton costs.
Levi Strauss products are sold in more than 110 countries worldwide through a combination of chain retailers, department stores, online sites, and a global footprint of more than 2,300 franchised and company-operated stores. Levi Strauss & Co.’s reported fiscal 2011 net revenues were 4.8 billion dollars (Rs 25,233 crores).