Fourth quarter net income of $116 million grew 20 per cent primarily reflecting higher EBIT and lower taxes due to additional net foreign tax credits as well as the favourable impact of foreign operations as compared to 2016.
Adjusted EBIT grew 7 per cent in the fourth quarter reflecting higher revenues and gross margins. For the full year, adjusted EBIT was flat, as higher revenues and gross margins were offset by higher costs related to the expansion of the company's direct-to-consumer business, increased advertising investments and higher compensation expense reflecting stronger company performance.
"Our growth and momentum accelerated in Q4 capping 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," said Chip Bergh, president and chief executive officer.
Direct-to-consumer revenues grew 20 per cent for the fourth quarter and 15 per cent for the full year on performance and expansion of the retail network, as well as e-commerce growth. The company had 53 more company-operated stores at the end of fiscal 2017 than it did at the end of fiscal 2016. Wholesale reported revenues grew 10 per cent for the fourth quarter, reflecting higher revenues from the Americas and Europe, and grew 5 per cent for the full year primarily reflecting growth in Europe.
On a reported basis, gross margin for 2017 was 52.3 per cent compared with 51.2 per cent in fiscal 2016, primarily reflecting strong growth in international and retail revenues, favourable transaction impact of currency and sourcing savings. The operating income of $467 million for the fiscal year was up from $462 million in 2016, reflecting global revenue growth and higher gross margins, partially offset by continued investments in the direct-to-consumer business and increased investments in advertising. (RR)
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