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Levi's losses widen in second quarter

Levi Strauss & Co saw its losses grow in the second quarter of 2010 to $14.4m (£9.4m) from $4.1m (£2.7m) in the same quarter last year.

Levi’s said the loss was due to higher financing costs.

The denim brand saw revenue rise 8% to $977m (£641m) in the three months to May 30. Gross margin rose 522 basis points to 51.1% of sales.

Revenue was up across all regions, with the strongest performance coming from Europe, where sales rose 9% to $240m (£157m).

Levi’s said Europe benefited from the impact of the acquisition of the footwear and accessories businesses during 2009 and from expansion of the company-operated retail network.

However, Levi’s said gains in European retail revenues were partially offset by lower wholesale sales, which it blamed on the continued difficult retail environment across the region.

Licensing revenue grew 3.2% to $18.6m (£12.2m).

Levi’s chief financial officer Blake Jorgensen said: “We delivered solid operating results in the second quarter of 2010. Our cash flow is strong and we continued to build our liquidity position during the quarter. We also successfully completed the refinancing of our 2013 and 2015 debt maturities.

“As we continue to invest in the business, we remain focused on controlling costs and managing inventories.”

Readers' comments (1)

  • Levi's are in danger of overpricing itself in a very competitive market place and their losses are of no surprise.

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