Bigger margins help create bigger profit at Levi's

Bigger margins help create bigger profit at Levi's

American jeans brand Levi's has generated a much higher profit in the third quarter, because of higher gross margins, which were in turn realized thanks to a more efficient production process. Net profit grew 15 % to 58 million dollars (50 million euro).

Negative exchange rates

Not only did it manage higher margins, the company did also realize increased growth in its retail and wholesale activities. Nevertheless, company turnover dropped 1 % to 1.14 billion dollars (1 billion euro) because of exchange rates: if those unfavourable exchange rates were not present, turnover would have grown 7 %. Mainly its women's collection performed well with double-digit growth.

 

Retail turnover grew 8 % in the third quarter, thanks to the store network expansion in Europe and Asia, which is why European turnover grew 2 %. American turnover grew 18 % and Asian turnover even grew an astonishing 50 %.

 

CEO Chip Bergh expects the like-for-like turnover to drop in the fourth quarter, because the quarter has a week less than the same quarter last year. He does have faith yearly turnover and gross profit will grow compared to last year.

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