Home / Knowledge / News / Apparel/Garments / Levis Q1'FY14 net income plummets 53%
Levis Q1'FY14 net income plummets 53%
09
Apr '14
Levi Strauss & Co. announced financial results for the first quarter ended February 23, 2014.
 
Net revenues declined one percent on a reported basis and were flat on a constant-currency basis, reflecting lower sales at wholesale in the Americas, partially offset by improved performance in Asia and Europe.
 
First quarter net income declined 53 percent to $50 million, primarily reflecting restructuring and other charges related to the launch of a global productivity initiative. Excluding the global productivity initiative charges, adjusted EBIT declined nine percent to $159 million due to lower gross margin and higher retail costs.
 
First-Quarter 2014 Highlights
Gross profit in the first quarter declined to $576 million compared with $592 million for the same quarter of 2013. Gross margin for the first quarter was down slightly to 51.0 percent of revenues compared with 51.6 percent of revenues in the same quarter of 2013. The gross margin decline reflected higher discounted sales and inventory markdowns as well as product investment costs.
 
Selling, general and administrative expenses (SG&A) for the first quarter increased to $425 million from $410 million in the same quarter of 2013. The increase in SG&A was primarily driven by the retail network and $6 million in charges, primarily consulting fees for a centrally-led procurement project, associated with the first phase of a global productivity initiative.
 
Restructuring charges of $58 million were recorded in the first quarter of 2014 associated with the first phase of a global productivity initiative, primarily reflecting severance benefit costs associated with anticipated staffing reductions.
 
Operating income of $94 million in the first quarter was down from $181 million in the same quarter of 2013 due to the restructuring charges, higher SG&A and lower gross margin.
 
Net revenues in the Americas were down at wholesale, primarily due to lower sales of women’s products. Retail sales grew, primarily due to the timing of the Black Friday sales week, which occurred during the company’s first quarter. Operating income declined due to the region’s lower gross margin and net revenues.
 
Net revenues in Europe grew on a constant-currency basis due to performance and expansion of the company-operated retail network. Higher operating income reflected lower SG&A.
 
Net revenues in Asia grew on a constant-currency basis, reflecting improved product availability during the Chinese New Year sales season. Operating income declined, driven by the unfavorable impact of currency.

Must ReadView All

Textiles | On 7th Dec 2016

‘Price-competitiveness is crucial for China yarn market’

Kikani Exports, India based yarn supplier with 12 years of experience ...

Apparel/Garments | On 7th Dec 2016

Bangladesh RMG exports up 6.39% in July-Nov 2016

Readymade garment (RMG) exports from Bangladesh increased by 6.39 per ...

Courtesy: Fabindia

Apparel/Garments | On 7th Dec 2016

Infosys cofounder Nilekani invests in Fabindia

Through their family office Entrust, Infosys cofounder Nandan...

Interviews View All

Ghanshyam Ghoghari
Kimora Fashion

Bridalwear is not about reds and whites anymore

Pinkesh Jain
Everflow Petrofils Ltd

‘An innovative technology which India needs desperately is the...

Ajay Ghariwala
Luthra Group

We are ready to adopt or follow every opportunity

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Jay Ramrakhiani
Occasions Elegance Wear

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

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

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
December 2016

December 2016

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

SUBSCRIBE


Browse Our Archives

GO


Advanced Search