The buzz surrounding direct-to-consumer is having a positive effect on Levi Strauss & Co. The company reported direct-to-consumer revenues for first quarter 2017 increased 10 percent.

On Tuesday Levi Strauss & Co. announced Q1 net revenues increased 4 percent on a reported basis. Direct-to-consumer outpaced wholesale revenues, which increased two percent primarily due to growth in Europe.

On a reported basis, gross margin for the first quarter was 51.2% of revenues compared with 53 percent in the same quarter of fiscal 2016, reflecting an increase in sales allowances, unfavorable transactional impact of currency and slightly higher product costs. The company stated that these factors were partially offset by the margin benefit from growth in company-operated retail in Europe and Americas.

Net revenues in the Americas increased 2 percent during the quarter, driven by sales in Mexico and through direct-to-consumer business.

“Despite the on-going challenges in the industry, I am pleased that we delivered 5 percent currency-neutral growth over a strong Q1 last year,” said Levi President and CEO Chip Bergh. “We were able to deliver these solid results despite a declining U.S. wholesale business, because of the breadth of our portfolio. Specifically, we grew in all three regions, with particularly outstanding results in Europe; double digit growth in our direct-to-consumer business; and double digit growth on women’s and tops.”

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