Levi's brand is performing well in the Americas, Asia
Levi Strauss & Co. announced financial results for the fourth quarter and fiscal year ended November 29, 2009.
• Fourth-Quarter Net Income Up
• Strong Cash Flow and Liquidity
• Opportunistic Acquisitions Amid Economic Downturn
Fourth-quarter and full-year net revenues benefited from acquisitions completed in 2009, retail stores opened during the year and growth in most Asia Pacific markets. These contributions to revenue were more than offset by lower U.S. Dockers and Signature sales, challenging wholesale performance across Europe and continued sales declines in Japan. Full-year net revenues were down 3 percent excluding the negative effects of currency.
Fourth-quarter net income improved compared to the prior year. Operating income declines were more than offset by lower taxes. Full-year net income reflects the decline in net revenue and the investment in acquisitions and retail expansion.
"We ended the year with a higher fourth-quarter net income and an improved liquidity position compared to last year,” said John Anderson, president and chief executive officer. “We are pleased with the progress we have made in a very challenging global economy. The Levi's brand is performing well in the Americas and most of our markets in Asia, we completely overhauled our Dockers business, and we made several strategic investments to position the company for revenue growth in 2010.”
Fourth Quarter 2009 Highlights
• Gross profit in the fourth quarter was essentially flat at $618 million compared with $625 million for the same period in 2008 despite a 5 percent decline in net revenues. Gross margin for the fourth quarter increased to 51.1 percent of revenues compared with 49.2 percent of revenues in the fourth quarter of 2008, reflecting improved Levi's performance in the Americas and the positive impact of additional company-operated retail stores.
• Selling, general and administrative (SG&A) expenses for the fourth quarter increased to $501 million from $479 million in the same period of 2008. The increase was due to increased selling costs related to additional company-operated retail stores and higher pension expense. Higher SG&A expenses were partially offset by lower advertising and promotion expenses outside the United States and lower organization and distribution costs.
• Operating income for the fourth quarter was $118 million compared with $143 million for the same period of 2008, reflecting higher SG&A expenses.
Fiscal Year 2009 Highlights
• Gross profit for the fiscal year decreased to $1,973 million compared with $2,140 million in 2008. Gross margin decreased to 48.1 percent of revenues for the year compared with 48.6 percent of revenues in 2008. Gross margin was adversely impacted by currencies.
• Selling, general and administrative expenses decreased to $1,590 million for 2009 compared to $1,606 million the prior year. The decrease included favorable currency impacts and lower advertising and promotion expenses, partially offset by higher selling costs related to additional company-operated retail stores as well as higher pension expense.