REPORT_ Levi Strauss & Co announced that its revenues
for the third quarter ended August 25, 2013 increased 4 percent on a reported basis and 3 percent without the effect of currency, driven by strong performance from the Levi's and Dockers brands, particularly in the Americas with continued growth across both wholesale and retail channels.
Third quarter net income increased to 57 million dollars (Rs 352.7 crores) as compared to 28 million dollars (Rs 173.3 crores) in the third quarter of 2012, primarily reflecting non-recurring charges the company incurred in the third quarter of 2012 related to strategic business choices made in that period relating to operations in Asia Pacific region; and a 14 million dollars (Rs 86.5 crores) tax benefit related to the settlement of US Federal tax audits.
“Our positive first-half momentum continued in the third quarter, with top- and bottom-line growth,” said Chip Bergh, President and Chief Executive Officer of San Francisco-based Levi Strauss & Co, adding, “In a challenging consumer and economic environment, we are laser-focused on what's within our control to drive sustained profitable growth: innovative products, compelling marketing, engaging retail experiences, talent and cost management.”
Gross profit in the third quarter increased to 573 million dollars (Rs 3,545.7 crores) compared with 521 million dollars (Rs 3,223.9 crores) for the same period in 2012. Gross margin for the third quarter was 50 percent of revenues compared with 47 percent of revenues in the same quarter of 2012.
Net revenues increased 5 percent in the Americas primarily due to improved performance of the Levi's, Dockers and Signature brands at key customers in the wholesale channel, and of the Levi's brand in the company's retail stores. Lower operating income primarily reflected higher SG&A. Net revenues in Europe increased 3 percent on a reported basis, but decreased one percent without the effect of currency, as improved performance and expansion from the company-operated retail network was offset by a decline in sales to franchisees, most notably in Southern Europe.
Net revenues in Asia Pacific were flat on a reported basis. Excluding the impact of currency, a six percent increase in revenues reflected the company's decision in the third quarter of 2012 to phase out the Denizen brand in Asia, which reduced revenues in that period. Sales of the Levi's brand declined at retail and wholesale due to challenging conditions in most markets in the region. Higher operating income primarily reflected the Denizen phase-out.