Denim giant Levi Strauss & Co has announced a drop in net income for the full-year ended November 27, 2011, blaming high cotton prices.
The heritage denim brand said net income dropped from $157m (£98.6m) in the year to November 28, 2010 to $138m (£86.6m) in the full year to November 27, 2011.
Net revenues in the period had increased from $4.41bn (£2.76bn) the previous full-year to $4.76bn (£2.99bn) this year,
The company said its net revenues grew in each geographic region in the fiscal year 2011, due to the strength of the Levi’s brand and its global store network.
Fourth-quarter net revenues were up 4% on a reported basis compared to the same period in the prior year while fourth quarter net income decreased from the prior year due to the company’s lower gross margin in the fourth quarter of 2011.
Levi’s blamed the decline in gross margin on high cotton prices, which were not fully offset by the company’s price increases, as well as increased discounting.
“In the face of stiff cost and economic headwinds, Levi Strauss & Co. grew the top-line for the second year in a row,” said Chip Bergh, president and chief executive of Levi Strauss & Co.
“As we move forward, we need to build on this momentum and on our global scale, strong brands and innovation pipeline, while improving profitability and cash flow to deliver sustainable long-term growth.”
In Europe, the company said net revenues grew as a result of the expansion of the company operated store network.