Jeans maker Levi Strauss faces high cotton prices in Q4
08 Feb '12
4 min read
Fiscal Year 2011 Highlights - Gross profit for the fiscal year increased to $2,292 million compared with $2,223 million in 2010, as the increase in net revenues and a favorable currency impact offset the decline in gross margin. Gross margin was 48 percent of revenues for the year compared with 50 percent of revenues in 2010.
- SG&A expenses increased to $1,956 million for 2011 compared with $1,842 million in the prior year, primarily reflecting expenses associated with retail store expansion, the company's investment in global information technology and organizational changes.
- Operating income for 2011 was $336 million compared to $381 million the prior year, due to the lower gross margin and higher SG&A.
The company ended the fourth quarter with cash and cash equivalents of $205 million and unused availability under its credit facility of $495 million. Cash provided by operating activities declined to $2 million for 2011, compared with $146 million for 2010, primarily due to the higher cost of cotton. As a result, the company borrowed against its credit facility to fund working capital, and ended the fiscal year with net debt of $1.8 billion as compared to $1.6 billion at the end of 2010.
Levi Strauss & Co is one of the world's largest brand-name apparel companies and a global leader in jeanswear.