Levi
Levi's Engineered Jeans for S/S 2009
 

16 Apr. 2009

LEVI STRAUSS EUROPE WITH FIRST RESULTS

Levi Strauss & Co. has announced its first quarter 2009 financial results. As part of these results, Levi Strauss Europe, Middle East and North Africa (LSEMA) posted Q1 2009 net revenues of $267 million, down 19% on a reported basis (a 6% decrease in constant currency) compared to the same period the previous year. While sales in both the wholesale and branded retail channels are down, reflecting the weak economy, its retail expansion helped partially offset revenue declines in the region.

Operating income for the region was down 41% to $58 million, largely as a result of a decline in revenues and gross margin, as well as continued investment in the region’s retail network.

“While the European economy continues to prove exceptionally difficult, sales of Levi’s 501 jeans remained relatively stable in the first quarter of 2009 compared to last year and we will continue to invest in supporting our brands as we’ve done with the Levi’s® 501® campaign,” said Armin Broger, President Levi Strauss Europe, Middle East and North Africa. “Although we expect the difficult conditions to continue in this region, we remain focused on growing our retail network and taking advantage of opportunities in our developing markets,” he added.

Globally, net revenue for Q1 fell 12% to $951 million compared with the previous year, while net income declined 51% to $48 million, primarily due to lower operating income. Total operating income for the quarter decreased 43% to $106 million, mainly as a result of lower net revenues and gross margins.

CEO John Anderson, on the company’s investor call, remarked: “The retail environment remains difficult globally. Europe, in particular, has become very challenging and Asia is beginning to soften as well. We are seeing weaker competitors struggle in this environment and we are ready to step in and take share whenever opportunities arise. It will be a tough year, but we are taking the challenge head on.”

—Melanie Gropler

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