Levi Strauss & Co on Wednesday (10 October) reported a 24% jump in third quarter earnings as strong sales in Europe and Asia helped offset softness in its US Signature and Dockers brands.

In the three months to 26 August, net income at the privately held jeans giant rose to $61m from $49m in the prior year period, with results also helped by lower tax and interest expenses. 

Net revenues were up 2% to $1.051bn from $1.028bn, but would have been flat except for gains from exchange rates the company said. 

"The Levi's brand is growing around the world and our European business is performing very well," said John Anderson, chief executive officer. 

"Asia Pacific continued to grow with strong performance again in the emerging markets.  North America's lower revenue this quarter was disappointing, but I am optimistic about the region's results for the year. 

"Our year-to-date results put us on track to deliver modest revenue growth, solid net income improvement and reduced debt for the year." 

Gross profit increased 3% to $486m, compared to $473m in the prior year period. Gross margin increased slightly to 46.3% of net revenues compared to 46.0% in last year's quarter, the company said.       

Levi Strauss is managing to turn round years of falling sales by improving its product lines and upgrading fabrics, zips, finishes and styles; axing underperforming ranges; shifting production overseas to cut costs; and adding more brand-dedicated retail stores worldwide.

By region, sales in North America were down 4% to $633m on declines in its Signature and Dockers brands. The company says it is working on a strategic realignment of lower-priced Signature jeans brand, which is sold through mass-market retailers like Wal-Mart and Target.

Asia Pacific revenues rose 14% to $173m, helped by growth from emerging markets such as China and India, which both saw double-digit revenue increases.

European revenues also climbed 14%, to $246m, marking the fourth consecutive quarter of growth for the region. Strong sales of the Levi's Red Tab range, led by successful new premium fits and finishes for both men and women, alongside incremental revenues from the opening of new Levi's stores, helped drive the sales momentum.

"Our margins remain healthy and our strong cash flow enables us to reduce debt while continuing to invest in the future of the business," said Hans Ploos van Amstel, chief financial officer.

"While we have some challenges ahead, we expect to deliver another solid fiscal year," with modest growth in full-year net revenues and strong growth in full-year net income expected.

Levi's, based in San Francisco, California, is privately held but discloses quarterly financial results due to public debt.