Levi Strauss’s fourth quarter and full year 2015 results are unfavorable. The brand’s earnings have been affected by currency headwinds, the associated negative impact on tourism and the challenging global retail dynamics. The company reported 7 per cent and 5 per cent declines in net revenue for the fourth quarter and full year, respectively. On a constant currency basis, the net revenues for the fourth quarter and full year 2015 decreased 1 per cent and increased 1 per cent, respectively. Gross profit for both periods also decreased with the fourth quarter achieving $658 million compared to $680 million in the previous year and the full year achieving $2,269 million compared to $2,348 million in 2014.
On a constant currency basis, net revenues for the year declined one per cent in the fourth quarter but grew one per cent for the full year. On a reported basis, net revenues declined seven per cent in the fourth quarter and five per cent for the full year. Though results were negatively affected by currency translation, net revenue was helped by growth in Europe and Asia.
Direct-to-consumer sales grew mid-single digits on a constant currency basis. This growth reflected expansion of the retail network and increases in e-commerce. Wholesale revenues declined on a constant currency basis for both periods on account of the company’s fourth fiscal quarter having one fewer week compared to the prior year.
The most dramatic growth came in net income, which increased 51 per cent from 2014, reflecting the company’s lower restructuring charges associated with its global productivity initiative, lower interest expense and a pension settlement loss recorded in the fourth quarter of 2014. In 2016 Levi Strauss will continue to invest in its retail network and e-commerce.