Pants down at LeviÔÇÖs

Blue jean icon Levi Strauss has reported that its second quarter profits have plummeted 98 percent as a result of weak consumer spending in the US and the cost of new software which has also disrupted supplies.  Announcing its financial results for the second quarter ended May 25, 2008, yesterday, Levi Strauss declared net income of $1 million, compared to $46 million in the same quarter last year.┬á┬á The company blamed the weak US economy and costs related to rolling out new ERP (enterprise resource planning) software that caused shipping delays and dented US sales. It also said that sales in Europe and Asia had been hit by the rising cost of food and fuel. ┬á┬á "We're getting no help from the economy in any of our markets around the world," said chief executive John Anderson. ┬á┬á Global sales fell eight percent to $936 million in the quarter, with US sales falling by 19 percent. Sales of the US Dockers brand also decreased substantially during the period and the US LeviÔÇÖs and Signature by Levi Strauss & Co. brands reported smaller sales decreases.┬á┬á "We expected the second quarter to be tough, and it was,ÔÇØ said Anderson. ÔÇ£The retail environment in the United States remained challenging. In addition, our transition to a new enterprise resource planning system in the United States negatively affected our results. 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.ÔÇØ┬á┬á Analysts predict the next quarter to be key as the company traditionally does well when children return to school. ┬á┬á Read the Levi Strauss statement in full here.┬á┬á   ┬á┬á*┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á