LEVI’S OPERATING NET UP 45% IN 4TH QUARTER
SAN FRANCISCO — Levi Strauss Associates reported operating earnings gained 45 percent in the fourth quarter while sales moved ahead 10.8 percent.
The privately held apparel giant said operating earnings surged to $313 million from $215.6 million the previous year. Net profits rose to $194.4 million from $141 million. Sales increased to $1.77 billion from $1.6 billion.
In the year ended Dec. 31, operating earnings were up 13.8 percent to $969.1 million from $851.7 million. Sales edged up 3.1 percent to $6.07 billion from $5.9 billion.
Net earnings, including a $236.5 million accounting charge in the latest year, slipped to $321 million from $492.4 million.
The company attributed the operating profit gain in the year to continuing strong demand for its core denim products in both the U.S. and Europe, lower costs of goods sold and higher other operating income.
In the U.S., dollar sales were flat at $3.7 billion. Record overall dollar and unit sales in the Levi’s product line offset lower dollar and unit sales of Dockers. Dockers’ sales decline reflected finishing capacity limitations for wrinkle-resistant pants during 1994 and the repositioning of the women’s Dockers line.
Outside the U.S., sales increased 8 percent to $2.4 billion, driven by record dollar and unit sales in Europe, with particularly strong results in Italy and Germany. Non-U.S. businesses represented 39 percent of total company sales and 50 percent of the company’s profit contribution before corporate expenses and taxes.
The company said the successful introduction of Dockers brand into European markets and expansion into new product categories, including wrinkle-resistant products, “have set the stage for future growth as proven consumer trends, such as casual dress in the workplace, continue to gain momentum.”
George B. James, senior vice president and chief financial officer, noted that the “healthy earnings” and record sales in 1994 were achieved despite “growing competition and economic challenges we’re facing in the markets where we do business.”
James said the company is “investing heavily” in upgrading its worldwide operations to improve customer service.
“These investments will likely continue to affect our income in the short term, but we are confident that our efforts over time will help Levi Strauss & Co. maintain its leadership position in the apparel industry and in the constantly changing retail environment,” James said. — Fairchild News Service