European revenue drops at Levi's in Q4 despite sales rise
Levi Strauss & Co. saw a rise in net revenue for the fourth quarter ending 27 November 2022, largely driven by growth growth in America and Asia.
The company reported a 6% increase in overall Q4 net revenue to £1.2 billion ($1.6 billion). In Europe, net revenue dropped 18% on a reported basis to £298 million ($370 million).
Direct-to-consumer (DTC) net revenue decreased 2% on a reported basis and increased 6% on a constant-currency basis, driven by growth in company-operated stores in the Americas and Asia, offsetting a decline in Europe primarily due to store closures in Russia.
Wholesale net revenues declined 8% on a reported basis, or 4% on a constant-currency basis. Excluding the effects of currency, growth in Asia and Latin America was offset by wholesale declines in the US and Europe.
The company’s digital net revenue was down 7% year-on-year, but up 29% against pre-pandemic levels. Digital sales comprised 20% of fourth quarter net revenues, as compared to 16% in 2019.
Gross profit was £715 million ($887 million), compared to £786 million ($974 million) in 2021.
For the full year, Levi Strauss & Co. also shared the following results:
- Reported net revenue up 7% to £5 billion ($6.2 billion).
- Gross margin of 57.5%.
- Net income of £459 million ($569 million).
The trading update coincides with the expansion of Harmit Singh's role to Chief Financial and Growth Officer, which will enable "more direct control to execute against the company's strategic initiatives." Singh has worked for the company as CFO since 2013.
Chip Bergh, President and CEO of Levi Strauss & Co, said: "In 2022, we delivered strong, profitable growth as well as significant market share expansion, demonstrating the enduring strength of our brands, the diversity of our business and our team’s focused execution of our strategic plan.
"We continue to make progress against our strategic priorities, positioning us for further success in 2023. We remain the category leader in denim globally, making consistent market share gains year-over-year. Our high margin DTC business is delivering exceptional results and our diversification efforts provide additional growth drivers for sustainable long-term growth."