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Levi Sees Net Income Rise 29%

October 11, 2006|From Reuters

Levi Strauss & Co. said Tuesday that third-quarter net income rose 29%, helped by a gain from closing a distribution center, but revenue slipped on soft sales in Japan and less shelf space in the United States for its low-cost Signature brand.

But the San Francisco-based jeans and apparel company saw improved sales in Europe after its efforts to upgrade merchandise and put its product in higher-tier specialty retailers.

Net profit rose to $49.3 million from $38.2 million a year earlier, the privately held company said, helped by a $29-million benefit-plan curtailment gain related to the planned closure of a U.S. distribution center.

Revenue fell 1% to $1.02 billion, with a 1% drop in U.S. sales.

In Japan, which makes up 40% of the company's Asia-Pacific business, sales fell because of assortments that were out of favor with shoppers. Chief Executive Phil Marineau called it an "abnormal quarter" in Japan and said that merchandise had already been adjusted.

In the low-cost Signature line, sales fell 11%, hurt by top U.S. retailer Wal-Mart Stores Inc.'s reduction of shelf space for the brand's women's line.

Chief Financial Officer Hans Ploos van Amstel expects stable fourth-quarter revenue and higher profit.

Levi Strauss posts quarterly results because of its debt.

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