Home / Knowledge / News / Apparel/Garments / Jeans maker Levi Strauss faces high cotton prices in Q4

Jeans maker Levi Strauss faces high cotton prices in Q4

08
Feb '12
Levi Strauss & Co announced financial results for the fourth quarter and fiscal year ended November 27, 2011.

The company's net revenues grew in each geographic region in fiscal year 2011, primarily due to the strength of the Levi's brand and its global store network. Fourth-quarter net revenues were up 4 percent on a reported basis compared to the same period in the prior year and full-year net revenues were up 8 percent on a reported basis from the prior year. Fourth quarter net income decreased from the prior year due to the company's lower gross margin in the fourth quarter of 2011 and a $32 million increase in income taxes, primarily reflecting a $34 million tax benefit recorded in the fourth quarter of 2010.

“In the face of stiff cost and economic headwinds, Levi Strauss & Co. grew the top-line for the second year in a row,” said Chip Bergh, president and chief executive officer of Levi Strauss & Co. “As we move forward, we need to build on this momentum and on our global scale, strong brands and innovation pipeline, while improving profitability and cash flow to deliver sustainable long-term growth.”

Fourth Quarter 2011 Highlights

- Gross profit in the fourth quarter was $624 million compared with $647 million for the same period in 2010. Gross margin for the fourth quarter was 46 percent of net revenues compared with 50 percent of net revenues in the fourth quarter of 2010. The decline in gross margin resulted from the adverse impact of higher priced-cotton, which was not fully offset by the company's price increases, and increased sales to the discount channel to manage inventory.

- Selling, general and administrative (SG&A) expenses for the fourth quarter increased to $532 million compared with $528 million in the same period of 2010, primarily reflecting expenses associated with organizational changes and the company's investment in information technology.

- Operating income for the fourth quarter decreased to $92 million compared with $119 million for the same period of 2010, due primarily to the decline in gross margin.

- Higher net revenues in the Americas primarily resulted from price increases and continued growth in the Levi's retail business, which offset a decline in the U.S. Dockers brand.

- Net revenues grew in Europe from expansion of the company-operated retail network.

- Net revenues in Asia Pacific increased for the Levi's and Denizen brands, including the expansion of the company's brand-dedicated retail network. The growth in the region was partially offset by lower net revenues in Japan.

“Our fiscal 2011 results reflect the impact of higher cotton prices and the difficult economic environment,” said Blake Jorgensen, chief financial officer of Levi Strauss & Co. “We are focused on operating our business with discipline and improving our cash flow to help us navigate the challenges ahead.”


Must ReadView All

Pic: Shutterstock

Textiles | On 12th May 2021

Economic recovery under threat amid surging COVID cases: UN

While the global growth outlook has improved, led by robust rebound...

Pic: 2p2play / Shutterstock.com

Retail | On 12th May 2021

Retailers need to consider changes as US emerges from pandemic: NPD

Millions of new remote and hybrid-remote workers, kids returning to...

Pic: Shutterstock

Textiles | On 12th May 2021

Uzbekistan exported textile products worth $637.7 million in Q1 2021

Uzbekistan exported textile products worth $637.7 million to 54...

Interviews View All

Textile Industry, Head honchos

Textile Industry
Head honchos

Farmers who produce seeds earn 50 per cent more

Textile Industry, Head honchos

Textile Industry
Head honchos

The pandemic has reinstated need for organised retail spaces in Tier II...

Textile Industry, Head honchos

Textile Industry
Head honchos

One thing is certain, online sales will go up

Gus Bartholomew,

Gus Bartholomew

<b>Gus Bartholomew</b>, co-founder of SupplyCompass, explains to <b>Subir...

Ritu Oberoi,

Ritu Oberoi

Established in 2018, Forsarees is a socially driven business enterprise,...

P V Kadole,

P V Kadole

Nine co-operative organisations from Ichalkaranji came together to form an ...

Keith McMillen, Bebop Sensors

Keith McMillen
Bebop Sensors

Bebop Sensors' smart fabrics allows for a new level of interaction between ...

Frank Heislitz, Freudenberg

Frank Heislitz
Freudenberg

Freudenberg Performance Materials is a leading global manufacturer of...

Silverio Baranzano, Fitesa

Silverio Baranzano
Fitesa

Fitesa is a leader in the nonwoven fabrics industry, specialising in...

Seema Agrawal, Artisan Saga

Seema Agrawal
Artisan Saga

Artisan Saga, founded by Kaushik Rajani and Seema Agrawal, is an online...

Niti Singhal, Twee In One

Niti Singhal
Twee In One

Best known for convertible clothing, Indian brand Twee In One by designer...

Vidur Adlakha & Riccardo Bennidini, La Fuori

Vidur Adlakha & Riccardo Bennidini
La Fuori

With an active presence in US, Italy and India, clothing brand La Fuori...

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

Leave your Comments


May 2021

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


Advanced Search