Levi Strauss turns profitable despite discounting and higher cotton costs
Levi Strauss & Co. reported a second-quarter profit, aided by higher sales to store chains and in Asia and Europe that helped mitigate the damage to margins from higher cotton costs and discounting.
The private company said second-quarter net income was $21 million, compared with a loss of $14.4 million a year earlier.
Revenue, which includes sales and licensing revenue, rose 11.9% to $1.09 billion.
Sales grew 19% in Asia and 17% in Europe; in constant-currency terms, the increases were 12% and 9%, respectively.
In the Americas, sales were led by the company’s namesake jeans, offsetting a drop in sales of Dockers. Revenue in the Americas was up 7%.
Gross margin was down 2 percentage points to 49% of revenue because of higher cotton costs and an increase in discounting.
Levi’s clients include department store companies such as Macy’s Inc., J.C. Penney Co. and Kohl’s Corp.
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