Levi Strauss & Co
, a global leader in Jeanswear
, reported a decline of 2 per cent net revenue in the fourth quarter (Q4) FY19 at $1,569 compared to Q4 FY18. The net revenues for the financial year that ended on November 24, 2019, increased 3 per cent to $5,763 million. Gross profit for Q4 rose 1 per cent to $851 million compared to same period last year.
Selling, general and administrative expenses (SG&A) for the fourth quarter were $720 million.
In the Americas, net revenues declined 5 per cent to $876 million. The region's direct-to-consumer net revenues declined 7 per cent, reflecting the lack of black friday benefit in the current year. The region's wholesale net revenues declined 4 per cent due to reduced shipments to the off-price channel in 2019, the Dockers line reset in the second half of 2018, and the impact of an acquisition of a South American distributor in 2019.
In Europe, net revenues grew 5 per cent to $442 million reflecting continued broad-based growth in both direct-to-consumer and wholesale channels across the region. The lack of black friday benefit in the current year adversely impacted the total region's year-over-year net revenues growth. Europe's operating income grew 47 per cent, reflecting the net revenues growth and a higher gross margin from direct-to-consumer growth, lower advertising due to a timing shift to earlier in the year, and leverage on base costs.
In Asia, net revenues grew 1 per cent to $251 million primarily reflecting growth in the direct-to-consumer channel. Revenue growth in Asia was partially offset by declines in Hong Kong, reflecting the unrest there, and in India, a seasonal shift in the timing of shipments.
Incorporating the anticipated benefits of black friday week in the Q1, and 53rd week which will fall in the Q4 and will include a second black friday, the company expects net revenues growth of around 7 per cent for fiscal 2020.
Additionally, the benefit of the company's acquisition of a distributor in South America is expected to be substantially offset by a change in ownership of the company's US footwear distributor, which has been purchased by one of the company's licensee partners, which will result in a license revenue stream replacing what formerly was wholesale sales to the footwear distributor.
Fibre2Fashion News Desk (JL)