Levi’s CEO Chip Bergh Sees Challenges and Opportunities in Weak Market

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Chip Bergh has battened down the hatches at LeviStraussCo., but said the denim brand is ready for what comes next — even with a big currency hit to the company’s outlook.

Net income fell 11 percent to $173 million, or 40 cents a share, from $193 million, or 47 cents a year earlier.

Like most other brands, Levi’s started raising prices last year when consumers were more ready to spend and is holding on to the prices. Bergh said the companies’ average unitprices are up 6 percent from a year ago. That’s below the overall 8.3 percent rate of inflation logged across the economy in August, but still better than the 5.1 percent gain seen in apparel, according to the Labor Department’s Consumer Price Index.

Stock market investors are future-focused and might well have had an eye on the revenue outlook for the year, which fell from a projected increase of 11 percent to 13 percent down to 6.7 percent to 7 percent growth on a net basis. Factoring out currency fluctuations, revenues are set to rise 11.5 percent to 12 percent.

“Our September here in the U.S. in our direct-to-consumer business was up 10 percent, so we’re continuing to see strength in our brands,” the CEO said. Core product that can be sold across multiple seasons represented about two-thirds of total inventories.

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