Levi Strauss & Co. said its second-quarter loss widened as financing costs erased the positive effects of higher sales and margins and advantageous currency swings.
For the three months ended May 30, the net loss attributable to the San Francisco-based denim and sportswear firm rose to $14.4 million from $4.1 million in the year-ago period. Included in the bottom-line result was a $16.6 million pretax loss on the early extinguishment of debt. Operating income, exclusive of the debt effect, was up 23.4 percent to $69.2 million from $56.1 million a year ago.
Sales rose 8.1 percent to $958 million, versus $886.5 million in the 2009 quarter, and licensing revenue grew 3.2 percent to $18.6 million from $18 million. Total revenues moved up 8 percent to $976.5 million from $904.5 million, and gross margin rose 522 basis points to 51.1 percent of sales against 45.9 percent in the year-ago period. The company said that the improvement reflected the increased contribution of the company’s stores and their higher margins compared to wholesale operations.
In the Americas, sales were up 8 percent, to $558 million, and grew 6 percent on a constant currency basis. In Europe, sales increased 9 percent, to $240 million, and gained 7 percent at constant currency. Asia-Pacific sales hit $178 million, an 8 percent rise that, upon conversion for currency effects, translated into a 2 percent decline.
“We continue to invest behind the brands,” John Anderson, president and chief executive officer, said on a conference call with analysts. “We believe we have a compelling consumer proposition. We selectively look to continue to invest in retail. It’s a battle.”
He said Japan continues to detract from results in the Asia-Pacific region, but added that he was somewhat encouraged by results in Europe: “If there’s good news, it is that there is no further deterioration.”
For the six months, net income dropped 4.5 percent to $42 million, from $43.9 million, as total revenues picked up 8.6 percent to $1.97 billion, from $1.82 billion. Year-to-date operating income was up 8.8 percent to $176.5 million from $162.1 million during the first six months of 2009, and gross margin improved to 51.3 percent of sales from 46.4 percent.
Cash and cash equivalents rose to $353.1 million as of May 30, 30.4 percent above the $270.8 million on the books as of Nov. 29. Inventories rose to $452.5 million from $451.3 million six months earlier.
Long-term debt stood at $1.78 billion on May 30, down from $1.83 billion on Nov. 29.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)