Levi Strauss & Co sales tepid in Asia
Levi Strauss & Co sales grew six per cent and the apparel company’s adjusted pre-tax loss rose by 7 per cent in the last financial quarter.
Levi Strauss & Co’ Asia sales were tepid at best, up just 2 per cent, while profit was unchanged. However European sales soared by 17 per cent and profit by 31 per cent.
The company says direct-to-consumer revenues grew 13 per cent as the company continued to expand its physical store network and drive its e-commerce division. Wholesale revenues grew 2 per cent, largely driven by Europe.
The company’s net profit declined by $13 million, primarily due to a $23 million loss on early extinguishment of debt, which will result in a substantial reduction in the average cost of debt and interest expense for the company.
In Asia, the flat operating income reflected higher selling costs to support retail expansion, including e-commerce, partially offset by higher net revenues.
“Our business is more diversified than ever before, driven by disciplined execution of our long-term growth strategies, and investments in product innovation and the consumer shopping experience,” said Chip Bergh, president and CEO of Levi Strauss & Co. “Our strong year-to-date revenue growth reinforces the benefits of a more balanced portfolio as our women’s, tops, direct-to-consumer and international businesses delivered solid results, despite a slight decline in the US wholesale business. Based on the performance in the first half, we are raising revenue growth guidance for the full year.”
The company lifted its gross margin for the second quarter from 51.1 per cent to 52.3 per cent.