2013’s fourth quarter has not been a good one for jean manufacturer Levi’s, as three big reasons impacted the turnover. Weaker European sales, more promotional activities in the Americas and an adverse calendar situation resulted in a weaker performance.
Missed out on Black Friday
The quarter ended on 24 November 2013 and resulted in a 1.3 billion dollars (950 million euro) turnover, which is just slightly above the same quarter the year before (namely 1.297 billion dollars). partly because the calendar was not working in Levi’s favour. Black Friday, one of the most important American shopping days, was on 29 November 2013, several days after its fiscal year had ended.
Levi’s experienced a European sales drop of 5 %, and had to promote more in North and South America, which did create higher turnover, but also hurt the bottom line. A harsh winter in large parts of the Americas meant consumers were not as likely to go out shopping, while resources also became more expensive. That is why the profit margin dropped from 50 % in 2012 to 49.2 % in 2013: net profit dropped from 53 million dollars (39 million euro) to 17 million dollars (12 million euro),
Nevertheless, Levi’s managed to grow its turnover 2 % for the full fiscal year, to 4.7 billion dollars (3.4 billion euro), while net profit even grew 59 % to 229 million dollars (167 million euro). “We will focus on further growth, a more balanced portfolio and cost management”, CEO Chip Bergh said.