Levi's Profits Fall

US jeans maker Levi Strauss posted a 98 per cent drop in quarterly net profit. The company cited weak consumer spending in major global markets, including the United States.

The results abruptly ended about two
years of robust profit gains for the company with roots in the
California Gold Rush which had recovered from years of slumping
sales. Levi Strauss reported a second-quarter net profit of $1
million compared with $46 million a year earlier.
Retail
expansion also crimped profit, the company said. Levi Strauss owns
and operates some 48 US stores and is searching for new locations.
Those retail stores saw positive same-stores sales, a key gauge of
retail performance, during the quarter, the company said.
Revenues
fell 8 percent to $936 million from $1.02 billion. The weak US
economic environment hurt results in the Americas region, where sales
fell 19 per cent, the company said, together with shipping issues
related to the implementation of the company's enterprise resource
planning system (ERP).
Issues with the ERP system led to delayed
orders and cancellations by retailers and amounted to a "substantial
portion" of Levi Strauss' revenue decline in the quarter.