Home / Knowledge / News / Apparel/Garments / Levi Strauss sales marginally down in Q1 FY'13
Levi Strauss sales marginally down in Q1 FY'13
10
Apr '13
Levi Strauss & Co. (LS&Co.) announced financial results for the first quarter ended February 24, 2013.

Net revenues decreased 2 percent on both reported and constant-currency bases, due to lower sales in Asia Pacific and the impact from licensing the Levi’s brand boys business.  First quarter net income increased 117 percent to $107 million compared with $49 million in the first quarter of 2012, driven by a stronger gross margin and improved operating margin. 

“In the first quarter, we generated strong cash flow and posted a higher gross margin and net income, despite slightly lower revenues,” said Chip Bergh, president and chief executive officer. “We’re committed to reducing debt and strengthening the balance sheet.  Our cash flow and a successful debt refinancing we executed after the quarter closed have allowed us to pay down $185 million of our debt this year.”

First-Quarter 2013 Highlights

- Gross profit in the first quarter increased to $592 million compared with $549 million for the same period in 2012.  Gross margin for the first quarter was 52 percent of revenues compared with 47 percent of revenues in the same quarter of 2012.  The gross margin improvement reflected the lower cost of cotton, increased sales from the company’s retail stores and a favorable currency impact. 

- Selling, general and administrative expenses (SG&A) for the first quarter decreased to $410 million from $439 million in the same period of 2012.  The decline in SG&A was primarily driven by lower advertising reflecting shifts in the timing of the company’s campaigns to a later part of the year and lower severance expenses.

- Operating income of $181 million grew from $110 million the prior year due to the higher gross margin and lower SG&A.

Net revenues in the Americas were flat, as increased sales from company-operated Levi’s retail stores were offset by lower wholesale revenues reflecting the company’s 2012 decision to license the Levi’s brand boys business.   Higher operating income primarily reflected the region's higher gross margin.

Net revenues in Europe increased, reflecting continued growth from the company-operated retail network; this was partially offset by a decline in traditional wholesale channels, most notably in Southern Europe. Higher operating income primarily reflected the region's lower SG&A and improved gross margin.

Net revenues in Asia Pacific declined, reflecting lower sales at both company-operated retail network and wholesale channels, due to challenging conditions in most markets in the region, most notably China.  Operating income increased, primarily reflecting lower SG&A and the decision to phase out the Denizen brand in the region.  

Cash Flow and Balance Sheet

At February 24, 2013, cash and cash equivalents of $450 million were complemented by $574 million available under the company’s revolving credit facility, resulting in a total liquidity position of $1.0 billion.  Cash provided by operating activities of $143 million represented a $38 million increase compared with the same period in 2012, reflecting a tax refund and lower pension plan funding.

During the quarter, the company prepaid $50.0 million of its senior term loan due 2014 and paid a $25 million dividend.  Net debt declined to $1.2 billion at the end of the first quarter of 2013, compared to $1.3 billion at the end of 2012.

Levi Strauss


Must ReadView All

Apparel/Garments | On 4th May 2016

Ahead of FTA talks with China, Lanka worried about TPP

Even as Sri Lanka prepares for the third round of talks for a Free...

Textiles | On 4th May 2016

IMF predicts Asian growth to remain strong

The International Monetary Fund (IMF) expects growth in Asia and the...

Courtesy: GMAC Cambodia

Apparel/Garments | On 4th May 2016

Cambodia’s garment exports rise 13% in Q1

Garment and footwear exports from the Southeast Asian nation of...

Interviews View All

Loretta Kiss
Blushandbloom.com

How do you rate the demand for maternity clothes in the fashion sector?...

Narendra Somani
Modelama Exports Limited

What are the challenges faced by an exporter in terms of funding and...

Imran Lateef
Texlynx

What are the current trends noticed in textile and garment sourcing in the ...

Iago Castro Asensio
RCfil Distribuciones S.L.

<b><i>Iago Castro Asensio, International Business Manager of RCfil...

Mr. Dave Hill
Technical Absorbents (TAL)

An honours graduate in Chemistry, Dave Hill began his career working for...

Daniel Dwight
Cooley Group

An international executive with significant experience leading high-tech...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Pranav Mishra
Huemn

Designers Pranav Mishra and Shyma Shetty’s Huemn is known for its...

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
April 2016

F2F Magazine

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

SUBSCRIBE


Browse Our Archives

GO


<%@ language="VBScript" %>
feedback
We would love to hear from you about your experience using the new interface. A quick review of yours would help us give you a better experience.
Advanced Search