A Better-Fitting Levi's

Levi Strauss & Co. (San Francisco) reported a 3.5 percent growth in net sales for its third fiscal quarter ended Aug. 25, 2002.

Gross profit improved to 40.7 percent of sales for the quarter and operating income rose 4 percent. Net income declined 9 percent. The company said higher incentive compensation costs, a higher effective tax rate and the impact of currency volatility on the company's foreign currency management activities were partially offset by lower interest expense.

“Our positive third-quarter results are driven primarily by new products and effective retail programs,” said ceo Phil Marineau. “We're doing what we said we'd do — significantly improving our sales trends in the back half of the year. Based on strong retail orders and consumer sales, we're encouraged about the fourth quarter. Despite the sluggish economic and retail conditions worldwide, we're on track to stabilize sales by year-end, positioning us for growth in 2003.

“In the United States, our product innovation is resonating with consumers,” Marineau continued. “The new fits and finishes in the revitalized Levi's jeans line are selling strongly, and the Dockers Go Khaki with Stain Defender also is doing well. In Europe, where we've grown five out of the last six quarters, we've taken swift action to become more price competitive in our basic jeans. Our Levi's Girls'business is doing well there, and we've received a very good reception to our new jeanswear finishes. Product innovation, improved retail presentation and marketing programs continue to fuel Asia's growth.”