Levi’s Profit More Than Quadruples

Levi Strauss & Co. said Tuesday that its fiscal second-quarter profit more than quadrupled.

The apparel maker posted net income of $26.8 million for the three months ended May 29, compared with $5.6 million a year earlier.

The increase included a boost from a Mexican court ruling that overturned a $45-million judgment against Levi, reversing a decision that had held the company liable for a police raid that wrongly targeted a former contractor during a crackdown on clothing counterfeiters.

The ruling prompted management to reverse a charge that had been set aside to cover the company’s potential liability. Levi declined to specify how much money it had set aside.

Second-quarter revenue totaled $943.7 million, down 1.6% from $958.8 million a year earlier. If not for fluctuations in the dollar that worked in Levi’s favor, the company said, its second-quarter sales would have dropped 4.4%.

The company said its long-term debt totaled $2.34 billion in May, up from $2.32 billion in February.

San Francisco-based Levi is privately held but discloses its financial results because some of its debt is publicly traded. The 152-year-old company is controlled by the Haas family, descendants of Levi Strauss.

After years of financial erosion, Levi is behaving more like a publicly held company as it places greater emphasis on boosting its quarterly profit than its sales.

“That is paramount above everything else,” Levi Chief Executive Philip A. Marineau said during a conference call Tuesday with investors and analysts.

In response to a question during the call, Marineau said Levi would consider selling some of its stock in an initial public offering, although he said nothing concrete was planned.

“We will examine all options to improve our capital structure,” he reiterated later in an interview.

Marineau stressed that the Haas family had no interest in selling the company outright.

Robert D. Haas, one of the company’s largest shareholders, with an 8.9% stake, is about to end a 32-year career as a Levi employee. He plans to retire Aug. 1, the company disclosed Tuesday.

Haas, who served as CEO from 1984 until being replaced by Marineau in 1999, will remain the company’s nonexecutive chairman, Levi said.

Through the first half of 2005, Levi earned $74.1 million, compared with $3.3 million a year earlier. Despite the second-quarter regression, Levi’s first-half sales rose 1.5% to $1.95 billion.