Levi's Brand global revenue up in constant currency
Levi Strauss & Co. announced financial results for the third quarter ended August 30, 2009 and filed its third-quarter 2009 results on Form 10-Q with the Securities and Exchange Commission.
The company's reported results reflected the challenging global economy and the adverse effect of currency exchange rates compared to the prior year. Net revenues declined 6 percent for the quarter. On a constant currency basis, net revenues decreased 2 percent. Global revenues for the Levi's brand increased on a constant currency basis compared to the same period last year.
The company reported a liquidity position of approximately $386 million of cash, cash equivalents and availability under its credit facility. The company's cash position reflected operating cash flows of $15 million in the quarter.
“It was a productive quarter in light of the tough market conditions worldwide,” said John Anderson, president and chief executive officer. “We invested in our business by completing two acquisitions during the past three months. We are effectively managing our balance sheet and controlling costs. And sales of the Levi's brand improved. Our teams are focused on strategies that we believe will build our brands, strengthen our competitiveness and drive future growth.
This includes expanding our retail operations and further leveraging the efficiencies and diversity of our global footprint. We'll also concentrate our investments in the geographic markets that offer the greatest potential for return, and on market-leading innovations that will create great new products.”
Third-Quarter 2009 Highlights
• Gross profit in the third quarter decreased to $494 million compared to $532 million for the same period in 2008, primarily due to the effect of currencies. Gross margin for the quarter was essentially flat at 47.5 percent compared with 47.9 percent in the same quarter of 2008.
• Selling, general and administrative expenses for the third quarter increased to $396 million from $389 million in the same period last year. Higher selling costs associated with additional company-operated stores and higher administration expense related to pension and acquisitions costs were largely offset by lower distribution and advertising & promotion costs.
• Operating income for the third quarter decreased to $98 million compared to $144 million for the same period of 2008, largely due to continued costs of retail expansion and unfavorable currency impact.
• The decrease in net revenues in the Americas region reflected the weak economic environment, including the impact of lower demand for men's casual pants in our Dockers brand and lower sales of Signature products. These were partially offset by increased Levi's brand sales and additional retail revenues from the company's expanding retail network, including 73 U.S. outlet stores acquired during the period.
• Net revenues in Europe decreased primarily due to the unfavorable impact of currency and the region's weak retail environment. Excluding the effect of currency, lower revenues mostly reflected the declining performance of Levi's Red Tab products for women in the wholesale channel. The decline was partially offset by increased sales from the company's expanding retail network.
• The increase in net revenues in Asia Pacific was driven by increased product promotions and continued retail store expansion, particularly in India and China. The revenue improvements were partially offset by declines in wholesale channel sales in some mature markets, particularly in Japan, where weak consumer spending and a consumer shift to lower-priced retailers continued.
Levi Strauss & Co