Levi Strauss & Co posted a rise in earnings of 13.7 percent ot $45.7 million in the second quarter on revenues up 5.8 percent to $1.02 billion. John Anderson, president and chief executive of the San Francisco-based group, spoke of “another solid quarter”, although the gains were mostly driven by strong US sales of Levi’s and Dockers. Particularly Dockers enjoyed a strong quarter in both its men’s and women’s businesses. Meanwhile, Europe, Japan and South Korea delivered marginal results.
While North American revenues rose 4.6 percent to $579.3 million, Europe saw revenues rise 3 percent, if excluding currency benefits. The Asia-Pacific region suffered as a result of weak sales in Japan and South Korea, both major markets for Levi’s. Both countries are undergoing management changes and are facing high inventory levels at retail. Anderson said both country will continue to face these challenges throughout the year. The company has introduced a premium line in both countries, which it hopes will give to impulse to these markets. Initial response to the line has been promising, Anderson said.
The North American market accounts for 57 percent of total revenues during the first half, while Europe and Asia make up the remaining 43 percent. Meanwhile, the Levi Strauss Signature business continues to struggle, as Wal-Mart discontinued the line in favour of its own brands. Target has also taken back retail space. The company expects the business’s performance to continue to be challenging throughout the rest of the year. The Levi’s brand is still the company’s bestseller, accounting for 71 percent of first-half sales. Dockers represented 22 percent of first-half sales.
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