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Levi's 2009 outlook remains uncertain
11 Feb '09
4 min read
• Operating income for the fourth quarter was $143 million compared with $190 million for the same period of 2007, reflecting higher SG&A expenses.
• Interest expense for the fourth quarter decreased to $35 million compared to $49 million in 2007.
Fiscal Year 2008 Highlights:
• Gross profit for the fiscal year increased to $2,140 million compared with $2,042 million in 2007. Gross margin increased to 48.6 percent of revenues for the year compared with 46.8 percent of revenues in 2007.
• Selling, general and administrative expenses increased to $1,606 million for 2008 compared to $1,387 million the prior year. Increased expenses in 2008 included higher selling costs resulting from additional company-operated retail stores, higher expense related to the U.S. ERP stabilization and increased advertising and promotion expenses primarily for the global Levi's 501 campaign. 2007 SG&A was positively impacted by $53 million in benefit plan curtailment gains compared with $6 million in 2008. The impact of currency contributed approximately $32 million to the increase in SG&A expense for 2008.
• Operating income in 2008 decreased to $525 million compared to $641 million in 2007, primarily reflecting the higher SG&A expenses.
• Interest expense for the year decreased to $154 million compared to $216 million in 2007. The decrease was primarily attributable to lower debt levels and lower average interest rates in 2008 following the company's refinancing and debt reduction activities in 2007.
• Interest expense for the fourth quarter decreased to $35 million compared to $49 million in 2007.
Fiscal Year 2008 Highlights:
• Gross profit for the fiscal year increased to $2,140 million compared with $2,042 million in 2007. Gross margin increased to 48.6 percent of revenues for the year compared with 46.8 percent of revenues in 2007.
• Selling, general and administrative expenses increased to $1,606 million for 2008 compared to $1,387 million the prior year. Increased expenses in 2008 included higher selling costs resulting from additional company-operated retail stores, higher expense related to the U.S. ERP stabilization and increased advertising and promotion expenses primarily for the global Levi's 501 campaign. 2007 SG&A was positively impacted by $53 million in benefit plan curtailment gains compared with $6 million in 2008. The impact of currency contributed approximately $32 million to the increase in SG&A expense for 2008.
• Operating income in 2008 decreased to $525 million compared to $641 million in 2007, primarily reflecting the higher SG&A expenses.
• Interest expense for the year decreased to $154 million compared to $216 million in 2007. The decrease was primarily attributable to lower debt levels and lower average interest rates in 2008 following the company's refinancing and debt reduction activities in 2007.
Levi Strauss & Co.
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