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Levi's reports strong Q1

Levi Strauss & Co saw first quarter net revenues in Europe rise 15% to $306m (£199m) following retail expansion in the region, but wholesale remained weak.

Levi’s said European sales growth for the three months to February 28 was driven by the impact of positive currency exchange rates and the acquisition of the company’s European footwear and accessories licensee, DC Company, in July, which brought footwear and accessories in house.

Levi’s said that revenue gains were offset by lower sales in the European wholesale division, which it blamed on a “continued difficult retail environment across the region”.

Globally, Levi’s net revenue rose 9% to $1.04bn (£675m). Levi’s said in a statement that revenue improvements were largely driven by positive effects of currency and added that net revenues were up 4% on a constant currency basis.

Pre-tax profit for the three months increased to $533m (£346m), up from $445m (£289) in the same period 2009. Gross margin increased to 51.5% of revenues, up from 46.8% of revenues in the same quarter last year.

Levi Strauss & Co president and chief executive John Anderson said: “We’re off to a good start for 2010 with revenue growth and our Levi’s brand performing well around the world. Our strategies are beginning to fuel top-line growth, with the acquisitions we made last year contributing to our overall revenue gains.”

He added: “We continue to invest in our business even as retail conditions remain challenging in many mature markets around the world, especially in Europe. These investments will put pressure on the bottom line in the near term, but are essential to achieve our goal of sustained, profitable growth.”

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