The US denim specialist Levi Strauss & Co. was able to increase its net sales by three percentage points to 1.6 billion US dollars (around 1.47 billion euros) in the fourth quarter. The reason for this is growth in the USA and the global increase in sales in the direct-to-consumer (DTC) business, according to the company.
DTC net sales increased 11 percent, driven by broad-based growth in both company-operated mainline and outlet stores and e-commerce. E-commerce net revenue grew 19 percent, primarily driven by double-digit growth across all regions for the Levi’s brand. As a percent of net sales in the fourth quarter, DTC accounted for 42 percent of total sales, compared to 39 percent in the fourth quarter of 2022.
In contrast, net sales in wholesale fell by two percent. However, the growth of Levi’s brands in the USA and Asia largely offset the decline in Europe.
Reported net sales of $6.2 billion (€5.7 billion) were unchanged compared to fiscal 2022 and on a constant currency basis.
“I am proud of what we have achieved over the last twelve years. By placing the Levi’s brand at the center of culture, we have revitalized this iconic brand and transformed our finances to make us stronger today,” said Chip Bergh, President and Chief Executive Officer of Levi Strauss & Co.
New CEO starts in 2024: Michelle Gass
He thereby passes the baton to his Successor Michelle Gass, President and new Chief Executive Officer of Levi Strauss & Co. “Although 2023 was a challenging year, we ended it on a strong note and I am optimistic for the future. I have full confidence in Michelle as my successor, who, together with the rest of our team, will position the company for success in its next phase of growth,” continued Bergh.
Several initiatives will start in the first quarter of 2024 that are intended to lead to more profitable growth. This includes a multi-year global productivity initiative focused on optimizing the operating model and structure, redesigning business processes and identifying opportunities to reduce costs while simplifying processes across the organization. This initiative is expected to result in net cost savings of $100 million (€92 million) in fiscal year 2024.
This also includes job cuts of ten to 15 percent of the company’s global workforce. As a result, the company expects to incur restructuring costs of up to $120 million (€110.46 million) in the first quarter.
Levi Strauss & Co. is one of the largest branded clothing companies in the world and a global leader in denim clothing. The company designs and sells jeans, casual clothing and related accessories for men, women and children under the brands Levi’s, Signature by Levi Strauss & Co., Denizen, Dockers and Beyond Yoga.