Levi Strauss & Co, the family-owned jeans retailer, has recorded second-quarter profits of $1 million – down 98% from 2007. Net income dropped to $936 million from $1 billion a year earlier.
The huge drop in profits is being blamed on a lack of consumer spending as the credit crunch reverberates around the world. The company said that net revenues in Europe and Asia Pacific were down slightly on a constant currency basis. The revenue decline in the Americas “is largely attributable to the impact of the difficult US economic environment,” as well as shipping issues, the company said in a statement.
“We expected the second quarter to be tough, and it was,” said John Anderson, president and chief executive officer. “The retail environment in the US remained challenging. We expect the rest of the year to be challenging.”
However, Anderson offered a note of hope for the future of the company. “We are taking decisive actions to position the company well for when market conditions improve,” he said. “Increasingly difficult economic conditions in many markets worldwide are impacting consumer spending, but our brands remain strong. We are pleased with the continued strong growth of our emerging markets and our retail network around the world.”