Levi Strauss ends the year with higher Q4 net income
Levi Strauss & Co announced financial results for the fourth quarter and fiscal year ended November 28, 2010.
The company grew revenues across each geographic region in fiscal year 2010, due to the strength of the Levi's brand, an expanded global store network and the acquisitions made in 2009. As a result, full-year net revenues were up 7 percent from the prior year and fourth-quarter net revenues were up 7 percent compared to the same period in the prior year. Full-year net income increased 3 percent over the prior year and fourth-quarter net income increased 28 percent compared to the same period in the prior year.
“In 2010, we made significant progress transforming our business and moving towards sustainable long-term growth,” said John Anderson, president and chief executive officer of Levi Strauss & Co. “We improved our profitability, and across all of our regions we grew revenues. Looking ahead, we remain committed to our strategies to enhance product, engage consumers with innovative brand experiences and expand our global presence.”
Fourth Quarter 2010 Highlights
• Gross profit in the fourth quarter was $647 million compared with $618 million for the same period in 2009 reflecting the increase in net revenues. Gross margin for the fourth quarter was 50.2 percent of revenues compared with 51.1 percent of revenues in the fourth quarter of 2009.
• Selling, general and administrative (SG&A) expenses for the fourth quarter were $528 million compared with $501 million in the same period of 2009. The increase was primarily due to higher selling costs related to additional company-operated retail stores.
• Operating income for the fourth quarter was $119 million compared with $118 million for the same period of 2009.
• Higher net revenues in the Americas primarily resulted from the Levi's retail business and U.S. Dockers brand.
• Net revenues in Europe increased due to growth in the company-operated retail network across the region and improvement in the Levi's wholesale business.
• Net revenues in Asia Pacific increased due to the continued expansion of the company's brand-dedicated retail network in China and India as well as in other emerging markets, while Japan continued to decline.
“We are pleased that we delivered top-line growth for 2010,” said Blake Jorgensen, chief financial officer of Levi Strauss & Co. “We are committed to driving long-term sustainable growth and we will continue to invest behind our strategies in 2011 as we did in 2010.”
Fiscal Year 2010 Highlights
• Gross profit for the fiscal year was $2,223 million compared with $1,973 million in 2009. Gross margin increased to 50.4 percent of revenues for the year compared with 48.1 percent of revenues in 2009. Gross margin benefited from an increased proportion of sales from the company's retail network.
• Selling, general and administrative expenses were $1,842 million for 2010 compared to $1,595 million the prior year. The increase resulted from a combination of continued expansion of the company-operated store network; planned advertising and promotions to support the U.S. Levi's brand and U.S. Dockers brand campaigns, as well as the global launch of Levi's Curve ID jeans for women and the launch of Denizen brand in Asia Pacific; and higher costs associated with the company's pension.