Hitch Up your Jeans

Levi Strauss & Co. (San Francisco) announced it has capped off its best year in more than a decade. Earnings for its fourth quarter ending Nov. 25, 2007, rose 178 percent.

The company recorded a fourth-quarter operating profit gain of 12 percent, the ninth straight quarter in which it enjoyed increased profits. Fourth-quarter revenues edged up 2 percent.

International sales, where the company benefited from the weak dollar, offset a dip in U.S. sales, but the jeans maker particularly benefited from a one-time accommodation from the Internal Revenue Service in its tax accounting.

Excluding the benefits of currency exchange, revenues decreased 2 percent, which the company attributed to falling sales during the second half of the year in North America. Revenues in the region fell about 3 percent. “I would say we saw a drop off [in the North American market] as the quarter progressed,” said president and ceo John Anderson. “We are starting to see some stabilization in the first quarter.”

Robert Hanson, president of the North American region, pointed to the difficult holiday sales season and the continued decline of the Signature brand as key elements of the decline. According to Women’s Wear Daily, Hanson said some retailers had chosen to “deemphasize our [Signature] product” during 2007. The company has had difficulty capitalizing on the strength of the core Levi's brand in the women's market, as well. Anderson said the U.S. Levi's business posted a solid performance over the year due to strength in men's and boys' product.

“The much smaller U.S. women's Levi's segment had disappointing business for the year, but we did begin to see signs of improvement in the second half,” he said.

Levi Strauss is a privately held company, but it releases its financial results because some of its debt is publicly traded.