Levi Strauss & Co. on Wednesday said that fourth quarter net revenues grew 13% on a reported basis, or 11% excluding $22 million in favorable currency translation. Direct-to-consumer revenues in the quarter grew 20%, while wholesale revenues grew 10%, reflecting higher revenues from the Americas and Europe, according to a company press release.
Fourth quarter net income grew 20% to $116 million, primarily reflecting higher earnings before interest, taxes, depreciation and amortization, and lower taxes, due to additional net foreign tax credits as well as the favorable impact of foreign operations.
For the full year, revenue grew 8%, or 7% in constant currency, excluding $11 million in favorable currency translation. Direct-to-consumer sales for the year grew 15%, while wholesale revenues grew 5%, primarily reflecting growth in Europe. But full-year net income fell 3% to $291 million, primarily due to a $23 million loss on early extinguishment of debt from debt refinancing and net losses on foreign exchange contracts, reflecting the dollar's weakness against most foreign currencies.
Levi's is taking charge of its own sales, growing direct-to-consumer sales by expanding its network of stores, as well as through e-commerce. In November the company announced that a new Levi's flagship store would open later this year in New York City's Times Square, in the heart of the city's shopping and entertainment district, replacing the brand's current location elsewhere on Broadway, which has been open since 2008.
The company is also stepping up its digital game, producing a shoppable video for the holidays and earlier in the year introducing an artificial intelligence-based chatbot tool called Virtual Stylist, available both via Facebook Messenger and on the Levi.com website, which helps users determine which pair of jeans is the best fit for them.
Levi's spent much of 2016 cutting costs even as it planned a brick-and-mortar expansion. The iconic jeans maker on Wednesday said that as of the end of its fiscal 2017 year, it has 53 more company-operated stores than it did the previous year.
President and CEO Chip Bergh said in a statement that its fourth quarter capped the strongest revenue year the company has had in more than a decade. "Our strategies are working and the investments that we've made to diversify our business over the past few years are paying off, best demonstrated by the strength of the Levi's brand globally," he said.
The company extended its happy holidays last month with the release of a limited-edition Air Jordan denim shoe fashioned with Nike. But it's facing some challenges, as sales on Amazon threaten to be undermined by that channel.