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8/12/2019 Jitu Finencial Levi's

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LEVI STRAUSS & CO. ANNOUNCES FIRST-QUARTER 2014 FINANCIAL RESULTS

SAN FRANCISCO (April 8, 2014)Levi Strauss & Co. (LS&Co.) announced financial results today for the

first quarter ended

February 23, 2014.

Highlights include:

Three Months Ended % Increase (Decrease)

($ millions) February 23, 2014 February 24, 2013 As Reported

Net revenues $ 1,130 $ 1,147 (1)%

Net income $ 50 $ 107 (53)%

Adjusted EBIT $ 159 $ 175 (9)%

Net revenues declined one percent on a reported basis and were flat on a constant-currency basis,

reflecting lower sales at

wholesale in the Americas, partially offset by improved performance in Asia and Europe. First quarter

net income declined 53

percent to $50 million, primarily reflecting restructuring and other charges related to the launch of a

global productivity initiative.

Excluding the global productivity initiative charges, adjusted EBIT declined nine percent to $159 million

due to lower gross

margin and higher retail costs.

We knew the first quarterwould be challenging, but a heavier promotional environment and unusually

bad weather made it

even more difficult than we expected, said Chip Bergh, president and chief executive officer. While we

anticipate the market

environment to remain challenging for the next few quarters, we are staying focused on whats within

our controlproduct,

commercially-driven marketing, and our cost structureto drive long-term profitable growth.


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First-Quarter 2014 Highlights

Gross profit in the first quarter declined to $576 million compared with $592 million for the same

quarter of 2013.

Gross margin for the first quarter was down slightly to 51.0 percent of revenues compared with 51.6

percent of revenues

in the same quarter of 2013. The gross margin decline reflected higher discounted sales and inventory

markdowns as

well as product investment costs.

Selling, general and administrative expenses (SG&A) for the first quarter increased to $425 million from

$410 million

in the same quarter of 2013. The increase in SG&A was primarily driven by the retail network and $6

million in charges,

primarily consulting fees for a centrally-led procurement project, associated with the first phase of aglobal productivity

initiative.

Restructuring charges of $58 million were recorded in the first quarter of 2014 associated with the first

phase of a global

productivity initiative, primarily reflecting severance benefit costs associated with anticipated staffing

reductions.

Operating income of $94 million in the first quarter was down from $181 million in the same quarter of

2013 due to

the restructuring charges, higher SG&A and lower gross margin.

Reported regional net revenues and operating income for the quarter were as follows:Net Revenues Operating Income *

Three Months Ended

% Increase

(Decrease)


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Three Months Ended

% Increase

($ millions) (Decrease)

February 23,

2014

February 24,

2013

February 23,

2014

February 24,

2013

Americas $627 $647 (3)% $111 $132 (16)%

Europe $300 $297 1% $71 $63 13%

Asia $203 $203 $47 $49 (4)%

* Note: regional operating income is equal to regional adjusted EBIT.

Net revenues in the Americas were down at wholesale, primarily due to lower sales of womens

products. Retail sales

grew, primarily due to the timing of the Black Friday sales week, which occurred during the companysfirst quarter.

Operating income declined due to the regions lower gross margin and net revenues.

Net revenues in Europe grew on a constant-currency basis due to performance and expansion of the

company-operated

retail network. Higher operating income reflected lower SG&A


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Cash Flow and Balance Sheet

At February 23, 2014, cash and cash equivalents of $503 million were complemented by $626 million

available under the

company's revolving credit facility, resulting in a total liquidity position of $1.1 billion. Free cash flow for

the first quarter was

$21 million. During the quarter, the company declared a $30 million dividend, which has been paid in

the companys second

fiscal quarter. Net debt at the end of the first quarter remained less than $1.1 billion.

Subsequent to the first quarter end, the company amended and restated its asset-based, senior secured

revolving credit facility,

extending the term, improving availability and obtaining more favorable interest rates and terms.

Investor Conference Call

The companys first-quarter 2014 investor conference call will be available through a live audio webcast

at http://

levistrauss.com/investors/#earnings-webcast today, April 8, 2014, at 1 p.m. Pacific / 4 p.m. Eastern. A

replay is available on

the website the same day and will be archived for one month. A telephone replay also is available

through April 14, 2014, at

800-642-1687.

Forward Looking Statement

This news release contains, in addition to historical information, forward-looking statements within the

meaning of the Private

Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our

current assumptions,

expectations and projections about future events. We use words like believe, will, so we can,

when, anticipate,

intend, estimate, expect, project and similar expressions to identify forward-looking statements,

although not all

forward-looking statements contain these words. These forward-looking statements are necessarily

estimates reflecting the best

judgment of our senior management and involve a number of risks and uncertainties that could cause

actual results to differ

materially from those suggested by the forward-looking statements. Investors should consider the

information contained in our


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filings with the U.S. Securities and Exchange Commission (the SEC), including our Annual Report on

Form 10-K for the

fiscal year 2013 and our Quarterly Report on Form 10-Q for the quarter ended February 23, 2014,

especially in the

Managements Discussion and Analysis of Financial Condition and Results of Operations and RiskFactors sections. Other

unknown or unpredictable factors also could have material adverse effects on our future results,

performance or achievements.

In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in

this news release may not

occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak

only as of the date

stated, or if no date is stated, as of the date of this news release. We are not under any obligation anddo not intend to make

publicly available any update or other revisions to any of the forward-looking statements contained in

this news release to reflect

circumstances existing after the date of this news release or to reflect the occurrence of future events

even if experience or future

events make it clear that any expected results expressed or implied by those forward-looking

statements will not be realized.

Cash Flow and Balance Sheet

At February 23, 2014, cash and cash equivalents of $503 million were complemented by $626 million

available under the

company's revolving credit facility, resulting in a total liquidity position of $1.1 billion. Free cash flow for

the first quarter was

$21 million. During the quarter, the company declared a $30 million dividend, which has been paid in

the companys second

fiscal quarter. Net debt at the end of the first quarter remained less than $1.1 billion.


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Subsequent to the first quarter end, the company amended and restated its asset-based, senior secured

revolving credit facility,

extending the term, improving availability and obtaining more favorable interest rates and terms.

Investor Conference Call

The companys first-quarter 2014 investor conference call will be available through a live audio webcast

at http://

levistrauss.com/investors/#earnings-webcast today, April 8, 2014, at 1 p.m. Pacific / 4 p.m. Eastern. A

replay is available on

the website the same day and will be archived for one month. A telephone replay also is available

through April 14, 2014, at

800-642-1687.

Forward Looking Statement

This news release contains, in addition to historical information, forward-looking statements within the

meaning of the Private

Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our

current assumptions,

expectations and projections about future events. We use words like believe, will, so we can,

when, anticipate,

intend, estimate, expect, project and similar expressions to identify forward-looking statements,

although not all

forward-looking statements contain these words. These forward-looking statements are necessarily

estimates reflecting the best

judgment of our senior management and involve a number of risks and uncertainties that could cause

actual results to differ

materially from those suggested by the forward-looking statements. Investors should consider the

information contained in our

filings with the U.S. Securities and Exchange Commission (the SEC), including our Annual Report on

Form 10-K for the

fiscal year 2013 and our Quarterly Report on Form 10-Q for the quarter ended February 23, 2014,especially in the

Managements Discussion and Analysis of Financial Condition and Results of Operations and Risk

Factors sections. Other

unknown or unpredictable factors also could have material adverse effects on our future results,

performance or achievements.


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In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in

this news release may not

occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak

only as of the date

stated, or if no date is stated, as of the date of this news release. We are not under any obligation anddo not intend to make

publicly available any update or other revisions to any of the forward-looking statements contained in

this news release to reflect

circumstances existing after the date of this news release or to reflect the occurrence of future events

even if experience or future

events make it clear that any expected results expressed or implied by those forward-looking

statements will not be realized.

SAN FRANCISCO (February 11, 2014)Levi Strauss & Co. (LS&Co.) today announced financial results for

the fourth quarter and fiscal year ended November 24, 2013.

Highlights include:

($ millions) Three Months Ended

Nov. 24, 2013

Three Months Ended

Nov. 25, 2012

Fiscal Year Ended

Nov. 24, 2013

Fiscal Year Ended

Nov. 25, 2012


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Net revenues $1,295 $1,297 $4,682 $4,610

Net income $17 $53 $229 $144

Fourth-quarter revenues were flat to prior year on a reported basis, and excluding the impact of

currency,

fourth-quarter net revenues increased slightly. Due to the timing of the c ompanys fiscal year-end, the

Black

Friday sales week occurred after the fourth quarter closed. Fourth-quarter net income declined due to a

slightly lower gross margin, higher seasonal advertising spend and a 2012 tax benefit.

Full-year net revenues increased two percent on a reported and constant currency basis due to

continued

growth in the Americas region and the strength of the Levis Mens business. Despite the lower net

income in

the fourth quarter, full-year net income increased 59 percent reflecting gross margin improvement.

"Overall, we are pleased with the progress we made in 2013. We grew the top- and bottom-line,

generated

significant cash from operations and further strengthened the balance sheet by reducing our debt," said

Chip

Bergh, president and chief executive officer. "These results were despite a challenging fourth quarter, in

part

due to the calendar shift; but also a soft fourth-quarter environment and clearly some challenges in

certain key

international markets and in our U.S. women's business. In 2014 we will continue to focus on growing

the

business over the long term by driving our profitable core business, addressing key opportunities to

build amore balanced portfolio, and improving our retail operations, while at the same time reducing our

controllable

costs."


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Fourth Quarter 2013 Highlights

n

2012. Gross margin for the fourth quarter was 49 percent of net revenues compared with 50 percent of

net revenues in the fourth quarter of 2012. The decline in gross margin reflected an increase in price

promotion and markdown activity, reflecting the slower holiday season and a decline in the Levis

Juniors and Misses businesses at wholesale in the Americas.

compared with $558 million in the same period of 2012, primarily reflecting increased advertising

activities across all markets such as in support of the continued international roll out of our shaping jean

for women, Revel, as well as the global Levis Modern Frontier campaign.

erating income for the fourth quarter declined to $66 million from $91 million for the same period

in

2012, reflecting the lower gross margin and higher advertising.

Fiscal Year 2013 Highlights

compared with $2,199 million in 2012. Gross margin

improved to 50 percent of revenues in 2013 compared to 48 percent in 2012. Gross margin improved

primarily due to the benefit of the lower cost of cotton in the products we sold in the first half of 2013.

Gross margin also improved due to favorable currency effects of approximately $25 million, and an

unfavorable impact of approximately $32 million in customer support and markdown charges taken in

2012 to exit the Denizen brand in Asia Pacific.


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The increase in SG&A was driven by higher incentive compensation expense, primarily related to

improved achievement against the company's internally-set objectives. Advertising expenses also

increased, reflecting new campaigns. Retail expenses also increased as we opened new stores. The

increase was partially offset by a decline in distribution expense, reflecting a $19 million facility

impairment charge the company recorded in 2012.

higher gross margin in the Americas and Asia Pacific as described above, as well as favorable currency

impact.

ACHIEVEMENT OF LEVIS COMPANY

CSR/SUSTAINABILITY

Global Citizen Award for Improving Workers Well Being Program from the SiliconValley Community Foundation (2013)

San Francisco Business Times Corporate Philanthropy Awards CommunityCommitment Award (2012)

Treehugger Best of Green Awards Best Jeans: Levis Water


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The Points of Light Foundation George Bush Corporate Leadership Award &,dash; toLS&CO. Chairman Robert Haas for his strong commitment to volunteerism, both

through personal example and by sponsoring employee programs (2004)

Ms. Foundation Gloria Corporate Philanthropy Award to the Levi StraussFoundation (2004)

San Francisco Beautiful corporate award in recognition of our inaugural CommunityDay, held in 2000 (2001)

Council on Economic Priorities corporate social responsibility survey LS&CO. isranked first out of 320 companies and assigned an A rating for charitable giving,

disclosure, family benefits, minority advancement, womens advancement and

workplace issues (2000)

Auburn University Quality of Life Award (1997)

The Business Enterprise Trust Lifetime Achievement Award to the Haas family forproviding steadfast social leadership while successfully adapting to the rigors of global

competition (1995)

The Council on Economic Priorities Americas Corporate Conscience Award forInternational Commitment (1994)

The White House and Congress honors employees at the Customer Service Center inCanton, Miss., for their volunteer work in support of children and families in the

Jackson and Canton communities (1994)

Volunteers of America Maud and Ballington Booth Award for Distinguished Service toHumanity (1993)

Business Ethics magazine Excellence in Ethics award (1993) Harvard University Dively Award for Corporate Public Initiative (1989) United Way Alexis De Tocqueville Award to the Haas family for outstanding

achievement in volunteerism (1985)

Lawrence A. Wien Prize in Corporate Social Responsibility (1984)EQUALITY

Human Rights Campaign Best Places to Work (2014) The Trevor Project Trevor Hope Award (2010) California Hall of Fame for History, Women and the Arts Induction to the California

Hall of Fame for embodying the spirit of California (2010)

San Francisco LGBT Community Center Impact Award (2009) Out & Equal Courage Award (2009)


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The Global Business Coalition on HIV/AIDS, Tuberculosis and Malaria BusinessExcellent Award Women and Girls Category (2008)

Asian American Legal Center of Southern California Silver Anniversary Award (2008) InterAction New Visions To End Poverty Certificate of Appreciation (2008) Human Rights Campaign Corporate Equality Award (2007) The Business Womens Network Education Foundations first Legacy Award for the

Levi Strauss Foundations support of Project Change, launched in 1991 to fight racial

prejudice and institutional racism in communities where LS&CO. has facilities (2001)

The first Ron Brown Award for Corporate Leadership, presented to LS&CO. for ProjectChange, at a White House ceremony conducted by President Clinton (1998)

The Philippines Department of Labor and Employment Most Outstanding FamilyWelfare Programs award, in the category of companies with 5001,000 employees

(1994) Advertising Age magazine declares Levis Women Breaking the Mold ad one of the

most important commercials launched in the past 50 years and says the ad broke new

ground in American advertising by dismantling stereotypes about women (1993)

The Governors Committee Media/Advertising Award from the New York State Office ofAdvocates for the Disabled for our positive portrayals of disabled people in the 501

Blues television ads (1985)

HIV/AIDS

India Conference on HIV/AIDS and Insurance Participation in discussions withUSAID, Government of India, non-governmental organizations, insurance industry and

other thought leaders (2011)Kaiser Permanente Red Ribbon Community Service Award

for Improving Access to HIV/AIDS Services (2010)

Ubuntu South African Advertising Award Levi Strauss South Africa Red for LifeCampaign against HIV/AIDS (2010)

Levi Strauss &Co. Koshland Award for Improving Access to HIV/AIDS Servicesthrough Insurance in Mexico; Internal Award, highest LS&CO. Business Achievement

Award (2010) Corporate Sector on HIV/AIDS Leader 2010 Invited to witness President Obama

signing of National AIDS Strategy (2010)

The Global Business Coalition on HIV/AIDS, Tuberculosis and Malaria LeadershipAward (2009)


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Certificate of Appreciation for Significant Contributions to the National AIDS MemorialGrove (2009)

The Global Business Coalition on HIV/AIDS, Tuberculosis and Malaria BusinessExcellence Award Women and Girls Category (2008)

AIDSWALK San Francisco Third-Highest Fund Raising Team (2008) U.S. Business Roundtable on HIV/AIDS Hosted discussions around U.S. National

AIDS Strategy (2009)

San Francisco AIDS Foundation Leadership Award for more than 25 years ofcorporate commitment to the fight against HIV/AIDS (2007)

YouthAIDS Corporate Citizenship Award to LS&CO. and the Levi Strauss Foundationfor 20 years of leadership and support of HIV/AIDS education and prevention programs

(2002)

The Hungarian Salus Puplica Award in recognition of LS&CO.s work on HIV/AIDSprevention in Hungary (2000)

The Centers for Disease Control Organizational Award for excellence in HIV/AIDSworkplace programs by a large business (1997)

WORKER RIGHTS

HIV/AIDS Employer Roundtable for U.S. Department of Labor Shared best practiceson employer-based HIV/AIDS programs (2011)

India Conference on HIV/AIDS and Insurance Invited panelist and only globalemployer to present our Employee HIV/AIDS Benefit Plan: HIV/AIDS and Insurance

(2011)

U.N. Global Compact and the U.N. Millenium Development Goals at University of NotreDame Invited panelist to present HIV/AIDS workplace initiatives and insurance

linkages (2011)

Office of National AIDS Policy Private Sector HIV/AIDS Programs Leader, presentedemployer HIV/AIDS issues and lessons from Employee HIV/AIDS Program (2010)

World of Work at Global Health Benefits Institute Invited to present EmployeeHIV/AIDS Program, ILO Recommendations on HIV/AIDS (2010)

National Business Group on Health Panel Chronic Health Challenges: Global Lessons Invited panelist to share best practices from Employee HIV/AIDS Program with U.S.

based H.R. leaders (2010)

Global Leadership Platforms on HIV/AIDS Participation in several InternationalAIDS Conference panels and poster presentations on approaches to address HIV/AIDS


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In the Workplace, Improving Access to HIV/AIDS Services for Employees, and

Engaging the Insurance Industry (2010)

Out and Equal Presented overview of workplace HIV/AIDS efforts (2010) Council on Foundations Invited as panelist to discuss corporate investments in

HIV/AIDS (2010)

Global Business Coalition on HIV/AIDS, Tb, and Malaria Invited panelist: EmployeeHIV/AIDS Program Leveraging Workplace to Expand Access to HIV/AIDS Education

and Services (2009)

ILO Negotiation of Recommendations on HIV/AIDS and the World of Work Invited torepresent U.S. Employers (2009)

Global Leadership Platforms on HIV/AIDS Participation in numerous internationalAIDS Conference panels and poster presentations on approaches to address HIV/AIDS

In the Workplace, Improving Access to HIV/AIDS Services for Employees, andEngaging the Insurance Industry (2008)

American Apparel and Footwear Association (AAFA) Excellence in Social ResponsibilityAward Creative Programs for the Workplace category, in recognition of LS&Co.s

partnership with the Asia Foundation to improve the lives of migrant women workers in

Chinas Guangdong province (2006)

Childrens Rights Internationals first Leadership in Corporate Responsibility Award, forLS&COs efforts to combat the use of child labor through the Terms of Engagement

(2005)

The Centers for Disease Control Organizational Award for excellence in HIV/AIDSworkplace programs by a large business (1997)

The Martin Luther King Jr. Center for Nonviolent Social Change Management SocialResponsibility Award in recognition of the unique partnership formed between

LS&CO. and UNITE (Union of Needletrades, Industrial and Textile Employees) (1996)

MARKETING & CREATIVE

One Show Portraits of Braddock Gold Pencil Winner for Documentary (2011) One Show Portraits of Braddock Merit Winner for Online Branded Entertainment

Campaign (2011)

Magic Best in Show Dockers Visual Display (2010) Communication Arts Typography Annual The Best Typography of the Year

Dockers Advertising/Print (2010)

ADDY Dockers Newspaper Campaign for Print (2010)


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GLAAD Outstanding Advertising Electronic for Levis brand Unbuttonedcampaign, partnership with LOGO (2010)

Out Magazines 4th Annual Power 50 Robert Hanson (2010) AICP Go Forth: America for Visual Style (2010) AICP Go Forth: America for Cinematography (2010) AICP Go Forth: America for Editorial (2010) Cannes O Pioneers Bronze Film Craft Lion (2010) Cannes Go Forth Bronze Film Craft Lion for Cinematography (2010) Effies Go Forth Finalist/TBD (winners announced end of April) (2010) Communication Arts Advertising Awards Go Forth: America 60 for Television

Commercial (2010)

Roseys Go Forth: America for Television, over $50k production (2010)

Silver ADDY Award Dockers Fit Guide for Dockers.com (2009) GLAAD 2009 Outstanding Advertising Electronic for Levis brand Change TV ad

(2009)

ADDY Special Judges Award Dockers Fathers Day Campaign for Dockers.com(2008)

ADDY Gold Award Dockers Web Site (2008)

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