NEW YORK — Booming sales in Asia and stabilization in the American market helped Levi Strauss & Co. snap eight years of declining sales in 2005.
For the year ended Nov. 27, the 152-year-old San Franciso-based company saw earnings explode 413.2 percent to $155.9 million, due in large part to a drastic reduction in restructuring charges. Comparatively, the company reported earnings of $30.4 million in 2004. Sales increased 1.3 percent to $4.12 billion from $4.07 billion in 2004.
The Asia Pacific market buoyed sales results, rising 14.1 percent to $689 million from $603.9 million. Sales in the North American market rose 1.2 percent to $2.46 billion from $2.43 billion, a result of only marginal declines in the core Levi’s business and Dockers business, and a 7.4 percent sales gain in the Levi Strauss Signature mass-channel business. Europe, however, continues to present the greatest challenges. Sales declined 5.9 percent in Europe to $981.1 million from $1.04 billion in 2004.
Despite the strong results, management warned that it expects the first half of 2006 to be difficult as sales absorb the impact of retail consolidation, a poor currency exchange environment and continued weakness in the European market.
“In the U.S. consumer confidence is at its highest but we’ve also seen one of the lowest savings rate. Then there’s the high price of oil,” said Phil Marineau, president and chief executive officer in a telephone interview. “There’s so many conflicting pieces of data it’s very hard to predict anything. I’ve been pleased with the trends I’ve seen at retail since the holidays and I’d hope they continue.”
For complete coverage, see tomorrow’s WWD.