Home / Knowledge / News / Apparel/Garments / Gross profit dips $9mn at Levi's in Q1 FY'12
Gross profit dips $9mn at Levi's in Q1 FY'12
11
Apr '12
Levi Strauss & Co. announced financial results for the first quarter ended February 26, 2012. Net revenues increased 4 percent on a reported basis and 5 percent on a constant-currency basis, primarily due to the growth of the Levi's brand, from the price increases we have implemented in response to rising cotton costs, and the global expansion and performance of the company's brand-dedicated retail network.

First quarter net income attributable to the company was $49 million compared with $41 million in the first quarter of 2011. Higher net income resulted from revenue growth and lower advertising expenses, which were partially offset by lower gross margins reflecting the adverse impact of cotton.

“We had a good start to the fiscal year. We're pleased with our performance in the first quarter, and we delivered these results despite the pressure of high-priced cotton,” said Chip Bergh, president and chief executive officer. “Conditions remain challenging in some parts of the world. As we move through the remainder of the year our focus will be driving profitable growth through the core pillars of our business.”

First-Quarter 2012 Highlights
Gross profit in the first quarter decreased to $549 million compared with $558 million for the same period in 2011. Gross margin for the first quarter was 47.1 percent of revenues compared with 49.8 percent of revenues in the same quarter of 2011. The decline in gross margin was primarily due to higher-priced cotton, which our price increases did not fully cover.

• Selling, general and administrative expenses (SG&A) for the first quarter decreased to $439 million from $459 million in the same period of 2011. The decline in SG&A was primarily driven by lower advertising, reflecting timing shifts as well as spends reductions in some markets.
• Operating income of $110 million grew from $99 million the prior year as the decline in gross margin was more than offset by the lower advertising expenses and the increase in net revenues.

Higher net revenues in the Americas primarily reflect higher Levi's brand sales, mainly due to price increases, which were partially offset by related volume declines in certain wholesale customers. Higher revenues also reflect increased sales of our Signature brand products and the addition of Denizen sales in the region.

Net revenues in Europe decreased primarily due to a lower volume of sales to both franchisee stores and to the traditional wholesale channels, reflecting the ongoing depressed retail environment, most notably in southern Europe. Net revenues of the company-operated retail network grew, reflecting improved performance of our stores.

Net revenues in Asia Pacific increased primarily due to price increases in the Levi's brand, which were partially offset by volume declines. Revenue growth also reflects continued expansion of the company's brand-dedicated retail network in the region.

At February 26, 2012, cash and cash equivalents were $238 million, complemented by $555 million available under the company's revolving credit facility. Cash provided by operating activities was $105 million, compared with $46 million for the same period in 2011, reflecting higher trade receivable collections. The increased cash from operations yielded a reduction in net debt, which declined to $1.7 billion at the end of the first quarter of 2012, compared to $1.8 billion at the end of 2011.

“Given the challenges we anticipated in the first half of 2012, we're pleased with our strong cash flow and our improved working capital position,” said Blake Jorgensen, chief financial officer of Levi Strauss & Co.

Levi Strauss & Co

Must ReadView All

Courtesy: H&M

Apparel/Garments | On 30th Mar 2017

H&M group's sales increase 7% in 3 months to Feb '17

The H&M group's sales including VAT amounted to SEK 54,369 million...

Textiles | On 30th Mar 2017

Vietnam’s textile & garment exports earn $4bn in Jan-Feb

Vietnam earned $4 billion from textile and garment exports in the...

Textiles | On 30th Mar 2017

India Inc should work for July 1 GST roll out: Fin sec

The Goods and Services Tax (GST) will take India into a very exciting ...

Interviews View All

Anshul Sood
Oceedee

‘Indian footwear market is nascent and largely a trend follower’

Akash Khetan
Narayan Tex Fab

I find it hard to find professionals in Surat

Abhimanyu Singh Rathore & Barbara Anna Kosiorek
Kannbar

‘Blending cultures is the true beauty of fashion, where one’s imagination...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
March 2017

March 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search