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Levi's hampered by currency fluctuations

Levi Strauss & Co saw net revenue rise 7% to $1.1bn (£693m) for the three months ended August 29, but European sales were hit by a weaker wholesale market, investment in company-owned retail stores and unfavourable currency fluctuations.

Net revenue in Europe fell 3% to $259m (£163.1m) but was up 6% over the period if the negative effect of currency changes was stripped out.

The Levi Strauss & Co business, which owns the Levi’s and Dockers brands, performed better in the Americas and Asia Pacific regions where sales grew by 9% and 11% respectively, excluding any currency gains.

However operating income across the company shrank from $98m (£61.7m) to $86m (£54.1m), partly impacted by investments in retail and marketing. Retail openings did help the company report rising margins from from 48% to 49%.

Levi Strauss & Co president and chief executive John Anderson said: “Net revenue in the third quarter reflects the strength of the Levi’s brand around the globe in spite of a challenging retail environment.”

“In the face of tough economic conditions, we achieved several key milestones in our overarching strategy to grow our business around the world. We realigned our management structure around our global brands, launched the Levi’s Curve ID fit system for women and began the roll-out of the new Denizen brand in Asia. We’re investing in these global product initiatives to help us capitalise on growth opportunities when the global economy truly recovers.”

 

Readers' comments (1)

  • A weaker European market for Levi's is of little surprise. In my view this is due to the product being 'overpitched' with wholesale prices being too high, therefore making it increasingly difficult to get good margin and subsequently more competitive and profitable brands taking market share.

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