Levi Strauss Sees Profitable Year After Turn-Around Campaign
Levi Strauss & Co. is planning to open 100 new stores this year, mostly outside of the United States, as it concentrates on international sales and building markets in China, India and the Americas.
“Six years ago, we set out with an ambitious plan to turn business around with reliable consistent growth,” said Chip Bergh, the company’s president and chief executive officer, who was speaking during a Feb. 7 conference call about the company’s fourth-quarter results. “Despite a tough environment, we have executed a strategy for more diverse business globally.”
Revenues from Europe grew 28 percent during the fourth quarter ended Nov. 26, 2017, with strong sales in the women’s and tops business. In Asia, sales jumped 13 percent with the help of franchisee support. For the Americas—which includes Canada, the United States and Mexico—revenue growth was up 7 percent.
Overall for the fourth quarter, Levi’s had net income of $116 million compared to $96 million for the same period last year and revenues of $1.46 billion compared to $1.3 billion one year ago. For the fiscal year ending Nov. 26, 2017, net income totaled $281 million, a decline of 3 percent from the previous year’s $291 million, and revenues totaled $4.9 billion compared to $4.5 million in 2016.
The company’s e-commerce business grew 20 percent in 2017 with new websites opening in Canada, Mexico, Switzerland and Norway, Bergh said.
Levi’s has been slightly buffeted by the decrease in mall shoppers because only 5 percent of its full-price stores are located in shopping centers, said Harmit Singh, the company’s executive vice president and chief financial officer.
The company has 230 stores, with 180 of those located in outlet malls, which the company does not consider traditional malls.
Levi’s is also converting some of its franchise stores in China to company-owned stores, while it converted one of the 400 franchisee outposts in India to a company-owned store.
Singh said the company has reduced its sales to Sears, but it still makes up “a sizeable amount” of revenues.
Company executives said the current fiscal year will see a 4 percent to 6 percent growth in revenues because of the weaker U.S. dollar and improved negotiations with sourcing partners.