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Levi Strauss & Co. Q3 gross profit declined

Levi Strauss
Apparel industry   $562 million

Levi Strauss & Co. announced financial results today for the third quarter ended August 24, 2014. Gross profit in the third quarter declined to $562 million compared with $573 million for the same quarter of 2013.


Gross margin for the third quarter declined to 48.7 percent of revenues compared with 50.2 percent of revenues in the same quarter of 2013. The gross margin decline was primarily due to higher product costs and an increase in discounted sales across channels, reflecting a promotional retail environment and efforts to manage high inventory levels.

Selling, general and administrative expenses (SG&A) for the third quarter of $455 million were flat compared with the same quarter of 2013. Increased advertising investment and consulting fees primarily related to centrally-led cost-savings and procurement projects associated with the company's global productivity initiative were offset by SG&A savings realized from the initiative and a decline in incentive compensation expense.

Operating income of $105 million in the third quarter was down from $118 million in the same quarter of 2013 primarily due to the lower gross margin. Increased advertising investment and the charges associated with the company’s global productivity initiative were partially offset by savings realized from the initiative.

Adjusted EBIT, which excludes the charges associated with the company’s global productivity initiative, was $119 million, a decline of two percent compared with the same quarter of 2013.

 

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