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Q4FY15 operating income expands steeply at Levis
12
Feb '16
Operating income for the fourth fiscal quarter ended November 29, 2015 expanded steeply to $161 million from $50 million for the same period in fiscal 2014.

Explaining the massive hike in operating income, Levis said higher adjusted EBIT was complemented by lower restructuring and pension settlement charges.

Net revenues in the three month period of fiscal 2015 were down to $1,285 million as against $1,388 in the corresponding quarter of fiscal 2014.

On a reported basis, gross profit in the reporting quarter decreased to $658 million compared with $680 million for the fiscal ago quarter, due to unfavourable currency translation effects of approximately $43 million.

However, gross margin for the fourth quarter of fiscal 2015 grew to 51.2 per cent of revenues as against 49.0 per cent of revenues in the same quarter of prior fiscal.

“This was primarily due to lower negotiated product costs and streamlined supply chain operations, while price increases and direct-to-consumer sales growth also benefited gross margin,” it said in a press release.

Selling, general and administrative (SG&A) expenses for the quarter under review were $494 million vis-à-vis $581 million in the corresponding quarter of earlier fiscal.

“Currency favourably impacted SG&A by $32 million and excluding currency, lower costs primarily reflected a reduction in advertising expenses compared to the previous fiscal,” the company explained.

“This was also due to the timing of the company's campaigns, and a $31 million pension settlement charge recorded in the fourth quarter of fiscal 2014,” it informed.

Adjusted EBIT, which excludes the charges associated with the company's global productivity initiative and the pension charge, was $168 million, up from $134 million in the same quarter of fiscal 2014.

Net revenues in the full fiscal of 2015 also were down to $4,494 million compared to $4,754 million in fiscal 2014.

The company strengthened the balance sheet during fiscal 2015 by issuing $500 million of five per cent senior notes due 2025 and using the proceeds to refinance its seven-and-five-eighths per cent senior notes due 2020.

Net debt declined to $0.8 billion at the end of fiscal 2015, compared to $0.9 billion at the end of fiscal 2014.

At November 29, 2015, cash and cash equivalents of $319 million were complemented by $659 million available under the company's credit facility, resulting in a total liquidity position of approximately $977 million.

Free cash flow for fiscal 2015 was $81 million, down from $123 million in fiscal 2014, reflecting $29 million higher capital investment for the company's growth initiatives and a $20 million increase in dividends. (AR)

Fibre2Fashion News Desk – India


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