Net revenues at Levi Strauss & Co grew one percent on a reported basis in the fourth quarter and grew 2 percent excluding 6 million dollars in unfavorable currency translation. For the full year, reported revenue grew one percent and grew three percent excluding 77 million dollars in unfavorable currency translation. Fourth quarter net income declined 5 percent but year net income, however grew 40 percent primarily reflecting higher gross margins.
"We are pleased to report our fourth consecutive year of profitable constant currency revenue growth behind the strength of the Levi's brand and our global direct-to-consumer business," said Chip Bergh, President and CEO in a statement, adding, "Looking ahead, although it remains a very challenging environment, given our diversified portfolio we remain optimistic about our long term prospects for growth."
The company said, on a constant-currency basis, direct-to-consumer sales grew 11 percent for the fourth quarter and 12 percent for the full year, reflecting performance and expansion of the retail network and ecommerce across all regions; wholesale revenues declined one percent for the fourth quarter and was flat for the full year.
Adjusted EBIT declined 13 percent in the fourth quarter on a reported and constant-currency basis, full year, adjusted EBIT was flat on a reported basis but grew 2 percent on a constant-currency basis. On a reported basis, gross profit in the fourth quarter was 659 million dollars compared with 658 million dollars for the same quarter of 2015. The company had 41 net new company-operated stores at the end of 2016.
On a reported basis, gross profit for the fiscal year grew to 2,329 million dollars compared with 2,269 million dollars in 2015, despite unfavorable currency translation effects of approximately 36 million dollars.
In the Americas, excluding unfavorable currency effects of 8 million dollars, net revenues decreased one percent, as the company said, direct-to-consumer growth was offset by declines at wholesale. Operating income declined primarily due to lower revenues. In Europe, net revenues grew 13 percent reflecting strong double-digit growth across both wholesale and direct-to-consumer channels. Operating income declined due to investments in direct-to-consumer business and unfavorable transactional impact of the devaluation of the British pound.
In Asia, excluding favorable currency effects of 3 million dollars, net revenues declined one percent, as a decline in the franchise channel offset strong growth from company-operated stores and ecommerce. Operating income declined primarily due to an increase in franchisee support in Mainland China and direct-to-consumer expansion.
In 2016, in the Americas, excluding unfavorable currency effects of 35 million dollars, net revenues remained relatively flat, as directto-consumer growth was offset by declines at wholesale. Excluding unfavorable currency effects of 8 million dollars, lower operating income primarily reflected lower revenues, lower gross margin and higher investment in retail.
In Europe, excluding unfavorable currency effects of 24 million dollars, net revenues grew 10 percent reflecting single-digit growth in wholesale and double-digit growth in direct-to-consumer channels resulting from the expansion and performance of our company-operated retail network. In Asia, excluding unfavorable currency effects of 18 million dollars, net revenues grew 6 percent.