Levi Strauss & Co. (LS&Co.) today announced its financial results for the fourth quarter and fiscal year ended November 24, 2013.

In the fourth quarter of 2013, the company´s gross profit decreased to $637 million in comparison with the same period in 2012 ($649 million). Levi´s justifies this trend by an increase in price promotion and a decline in the Levi’s® Junior’s and Misses’ businesses at wholesale in the Americas. Selling, general and administrative (SG&A) expenses also grew $13 million in comparison with 2012 figures, reaching $571 million. Operating income for the fourth quarter also declined to §66 million from $91 million for the same period last year, reflecting the trends mentioned above.

In spite of the negative fourth quarter results, 2013 is together a year of growth. Gross margin improved to 50% of revenues in 2013 compared to 48% in 2012. The gross margin improved primarily due to the lower cost of cotton in the products sold in the first half of 2013, favourable currency effects of approximately $25 million and an unfavourable impact of about $25 million when exiting the Denizen® brand in Asia Pacific.

SG&A expenses increased to $1,885 million for 2013 compared with $1,865 million in the previous year. The increase in SG&A was driven by higher advertising and retail investments in order to implement new campaigns and open new stores. The operating income for 2013 was $466 million compared to $334 million the previous year, primarily due to higher gross margin in the Americas and Asia Pacific, as well as favourable currency impact.