US: Levi Strauss Q4 profit up 20% despite revenue drop
- Q4 profit up 20% to $53m
- Sales slipped 3% to $1.30bn
- Gross margin improved to 50%
Jeans giant Levi Strauss & Co has seen its fourth-quarter and full-year net profit rise after a tax benefit and lower cotton prices helped offset a fall in sales.
The San Francisco-based fim said net income jumped 20% to US$53m for the three months to 25 November, compared to $44m in the same period a year earlier. Growth was boosted by a $27m tax benefit.
Revenues, however, edged down 3% to $1.30bn from $1.34bn the year before. Gross margin improved to 50% from 46% on the back of increased sales from retail stores, a decline in sales to lower-margin channels, and lower cotton costs.
For the fourth quarter and full year, rising sales from company-operated retail stores in the Americas and Europe were offset by slowing economic conditions in Asia, as well as the decision to phase out its Denizen brand.
"In 2012, we made some tough choices and executed significant changes to set the company on a path towards driving sustainable profitable growth," said president and chief executive officer Chip Bergh.
"We have a largely new leadership team, sharper strategies and a new organisation model designed to win in the marketplace. We're focused on driving our profitable core businesses, expanding beyond the core to develop a more balanced portfolio, becoming a best-in-class retailer and making our cost structure more competitive."
Full-year net income rose 4% to $144m, up from $138m last year, while revenues fell to $4.61bn against $4.76bn in 2011.
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