When the pandemic hit, there was tremendous uncertainty about the impact it would have on our business. From the start, our goal has been to emerge stronger from this crisis and build a stronger, more profitable company for the future. On Wednesday, we released our latest earnings report, showcasing our fourth-quarter and year-end results. Thanks to the extraordinary efforts of our team, we beat our internal expectations and overall delivered a strong year.
Here are some highlights for the year and the quarter, all in constant currency:
- Full year net revenues were $4.5 billion, down 23% from prior year. Despite reduced traffic and store closures, the fourth quarter was profitable and generated positive cash-flow.
- Our owned ecommerce business grew at a record rate this year, up 29%; it’s also now profitable on a fully allocated basis.
- While our fourth-quarter revenues declined 12% due to the impacts of COVID-19, we beat our internal expectations and saw a significant sequential improvement from a decline of 27% in the third quarter, and 62% in the second quarter.
“In this most extraordinary year, I’m proud of the team and our accomplishments in the face of so much adversity. The steps we took on structural costs, cash management, agility and new capabilities helped drive results far ahead of our own expectations and give me great confidence in our future,” said Chip Bergh, president and CEO of Levi Strauss & Co. “We will double down on elevating our iconic brand, investing in direct engagement with our fans, advancing our fast-growing digital business and further diversifying our portfolio.”
As we look to the future, we are sharpening our focus on the key areas that will drive our business forward:
- Leading with our brand. Levi’s® has an unmatched brand heritage and authenticity that has resonated with consumers for more than 150 years. We remain the global leader in denim by a mile and we’re seeing increased demand for our iconic products, like our original 501® fit, which was up 80% across men’s and women’s on levi.com in the fourth quarter. By further strengthening the brand, we are focused on increasing market share in denim while continuing to increase our share of closet in other categories.
- Thinking — and acting — direct-to-consumer (DTC) first. We are accelerating our investments in our own retail stores and ecommerce businesses. We opened 21 NextGen stores in the fourth quarter, which offer an elevated and digitally connected experience for our consumers. DTC provides us the forum with which to show the best of the Levi’s brand with our fans. We are driving meaningful growth in our loyalty program and have reached close to four million members worldwide since rolling out the program in Europe in Q4. Additionally, our Levi’s® app continues to beat our expectations; in Q4, the download rate increased 65% versus the prior quarter, and 70% of our consumers on the app are Gen Z or millennials.
- Diversifying our business. We will accelerate our investments in areas that are underpenetrated, including international sales, women’s, our top’s business, DTC and ecommerce. Within wholesale, we are also focusing on attracting new consumers through diversification to more digital and more premium retail partners.
To learn more, read the full release here.