US: Costs push Levi Strauss Q2 earnings down
- Q2 earnings dropped to US$11m
- Gross margin narrow to 49%
- Sales fall 2%
Jeans giant Levi saw its earnings plummet in the second quarter
Jeans giant Levi Strauss & Co saw its earnings plummet in the second quarter, hurt by restructuring and debt extinguishment-related charges, as well as lower wholesale revenues in the Americas.
In the three months ended 25 May, earnings declined to US$11m from $48m a year earlier. The company recorded $28m in restructuring and other charges related to Levi's global productivity initiative, and a debt extinguishment charge of $11m.
Gross margin also declined in the quarter, to 49% of revenues compared with 49.9% in the year-ago quarter. The decline reflected an unfavourable sales mix and product investment costs.
Sales were down 2% to $1.08bn on a reported basis and 1% on a constant-currency basis, reflecting lower sales at wholesale in the Americas, partially offset by an improved performance in Europe and Asia.
"While we are encouraged by business improvements in Europe and Asia, ongoing traffic declines and an increasingly promotional environment continue to pressure our Americas region," said CEO Chip Bergh.
"We will continue to focus on what's within our control - from cost structure, to conversion in our stores, to engaging consumers with great product and innovation - in order to drive long-term profitable growth."
Help test our new apparel sourcing tool.
American Eagle Outfitters has settled an investigation through the US International Trade Commission (ITC) over patent infringement regarding certain laser abraded denim garments....
Italian fashion giant Benetton has become the latest company to join a ban on angora wool, pledging to boycott the fibre from all its collections sold in around 6,000 stores worldwide....
Denim brand G-Star Raw has become the latest company pledging to eliminate the use of rayon and viscose fabrics derived from ancient and endangered forests in its clothes....
- Trump and the apparel industry – Infographic
- How US border adjustment tax could affect apparel
- British Brexit plans prioritise tariff-free trade
- $1.7bn package to boost Pakistan clothing exports
- Mexico riots hit apparel retailers and shipments
- Cambodia clothing exports at risk from Brexit
- Apparel brands urge Bangladesh PM to address wages
- American Apparel to shutter all stores?
- MAS Holdings planning second industrial park
- New project to digitalise European fashion chains
- Outdoor performance apparel 2016: A broader perspective
- Anti-odour clothing: fresh fashion for an active lifestyle
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- Global market review of lingerie – forecasts to 2022
- Global apparel markets: product developments and innovations, October 2016