US: Levi Strauss Q2 profit slumps 37%
- Q2 net income fell 37% to $13.23m
- Net revenue down 3.7% to $1.05bn
- Gross margin slips to 46% from 49%
Jeans giant Levi Strauss & Co has seen its second quarter profit slump 37% after being hit by falling revenues in Asia and Europe and higher cotton costs.
Jeans maker Levi Strauss & Co reported its quarterly net profit slumped by more than a third as business in Asia declined and it faced difficulties in Europe.
"It is clear that the economic headwinds are getting stronger," said president and CEO Chip Bergh.
"While our business grew in the Americas, primarily driven by our own retail stores, Europe continues to be a challenge, and for the first time in two years our business in Asia declined.
Net income in the three months to 27 May fell to $13.23m, down from $20.97m in the same period last year.
Gross profit dropped 11% to $481m from $541m, with gross margin slipping to 46% of revenues from 49% a year ago. The company said price rises were unable to cover higher cotton costs.
Net revenue, meanwhile, fell 3.7% to $1.05bn, compared with $1.09bn last time. A 1% rise in the Americas, its largest market, was unable to offset declines of 12% in Asia Pacific and 9.6% in Europe.
"In the face of these tougher economic conditions, we are rationalising our business, reducing operating costs and focusing our resources on the opportunities that will have the most impact in growing shareholder value," Bergh added.
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