Constant-Currency Revenue Growth Offset By Unfavorable Exchange Rates
Net Income Reflects Debt Refinancing Charge

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SAN FRANCISCO (July 10, 2015) – Levi Strauss & Co. (LS&Co.) announced financial results today for the second quarter ended May 31, 2015.

Net revenues declined six percent on a reported basis and grew one percent on a constant-currency basis. Lower sales at wholesale, primarily in the Americas, were offset by increased sales from the retail network in Europe and Asia. Net income was impacted by a $14 million loss on debt retirement in conjunction with the April refinancing of notes scheduled to mature in 2020. Adjusted EBIT declined thirty-two percent on a reported basis and twenty percent on a constant-currency basis primarily reflecting increased advertising spend and investment in the company's direct-to-consumer channels. “In an environment that continues to be challenging, we were pleased to grow second quarter revenues on a constant-currency basis, due to our strong results in Europe and Asia,” said Chip Bergh, president and chief executive officer. “We continue to focus on what we can control, and make investments to generate consumer demand. As we move into the second half of 2015, we remain confident in our ability to grow full-year sales and adjusted EBIT on a currency-neutral basis, and look forward to the full global reset of our Levi's® women's product line.”

Second-Quarter 2015 Highlights

On a reported basis, gross profit in the second quarter declined to $500 million compared with $530 million for the
same quarter of 2014, and gross margin for the second quarter grew to 49.4 percent of revenues compared with 49.0
percent of revenues in the same quarter of 2014. Excluding $43 million in unfavorable currency translation effects,
gross margin improved 80 basis points, primarily due to lower negotiated product costs and a streamlined supply chain.

Selling, general and administrative (SG&A) expenses for the second quarter of $450 million grew $4 million compared
with the same quarter of 2014. Currency favorably impacted SG&A by $29 million. Excluding currency, higher costs
reflected the expansion of the company's retail network and ecommerce business as well as earlier timing of advertising investment.

Adjusted EBIT, which excludes the charges associated with the company’s global productivity initiative and debt
refinancing, was $63 million, down from $93 million in the same quarter of 2014, primarily reflecting unfavorable
currency effects and the higher SG&A. A reconciliation of Adjusted EBIT is provided at the end of this press release.
Operating income of $48 million in the second quarter was down from $65 million in the same quarter of 2014 reflecting
lower Adjusted EBIT and lower restructuring charges.

Regional Overview

• Net revenues in the Americas declined primarily due to the loss of women’s Dockers® products at wholesale as that
business transitions to a license model. Operating income declined due to increased advertising and direct-to-consumer
channel investment as well as lower net revenues, partially offset by a higher gross margin. Currency unfavorably
impacted net revenues by approximately 200 basis points.
• In Europe, currency translation unfavorably impacted net revenues and operating income by $56 million and $11
million, respectively. Excluding the currency effects, net revenues grew eight percent and operating income grew
twenty-four percent, reflecting growth from performance and expansion of the company-operated retail network.
• In Asia, net revenues were down five percent and operating income was down 38 percent on a reported basis. Excluding
currency effects, net revenues and operating income grew two percent and declined thirty-four percent, respectively,
reflecting growth in the company-operated retail network in a promotional environment.

Cash Flow and Balance Sheet

At May 31, 2015, cash and cash equivalents of $285 million were complemented by $533 million available under the company's revolving credit facility, resulting in a total liquidity position of approximately $818 million. Net debt at the end of the second quarter remained $0.9 billion. Free cash flow through the second quarter of 2015 was $8 million.

Global Productivity Initiative

Restructuring and related charges associated with the company's global productivity initiative primarily reflect severance benefit costs, pension plan curtailment gains and losses, other expenses associated with staffing reductions, and consulting fees primarily related to centrally-led cost-savings and procurement projects, as well as transition costs associated with the decision to outsource certain global business service activities. Actions taken to date for the global productivity initiative are expected to deliver net annualized savings of $125 – $150 million, relative to the cost structure of the company and foreign currency exchange rates prior to the commencement of the initiative. The company anticipates that it will incur additional restructuring charges related to the global productivity initiative, and now expects that the majority of the related actions will be implemented by the end of 2016. The company continues to believe that upon completion it will realize net annualized benefits of $175 – 200 million, relative to the cost structure and profitability of the company and foreign currency exchange rates prior to the commencement
of the initiative.

The company expects additional savings in future periods to come from streamlining its planning and go-to-market strategies, implementing efficiencies across its retail, supply chain and distribution network, and pursuing improved procurement practices.

Source: http://www.levistrauss.com/wp-content/uploads/2015/07/Exhibit-99.1-2Q-2015-Press-Release.pdf