• Q3 net income down 11% to US$51m
  • Revenue up 1% to $1.154bn
  • Gross margin drops on higher costs and discounts
Charges linked to Levis productivity initiative impacted its third-quarter performance

Charges linked to Levi's productivity initiative impacted its third-quarter performance

Levi Strauss & Co recorded a double-digit reduction in third quarter profit, thanks to the impact of charges linked to the company’s productivity initiative.

The US business said the modest rise in revenues was linked to increased sales from its global retail network, partially offset by lower wholesale figures in the Americas.

Gross margin dropped to 48.7% from 50.2% a year ago, mostly thanks to higher product costs and an increase in discounts, which Levi’s said reflected a promotional retail environment and efforts to manage high inventory levels.

“Despite continued external challenges, including soft retail traffic and a highly promotional environment, we grew revenue in the third quarter by focusing on the controllable aspects of the business,” said Chip Bergh, company president and CEO.

“The decline in net income essentially reflects the investments we're making to improve productivity.”