AT THE CENTER

AT THE

CENTER

OF CULTURE

2017 ANNUAL REPORT

DEAR

SHAREHOLDERS,

2017 was a turning point for the business, with the highest annual revenue growth rate that this company has delivered in a decade. Revenues grew 8 percent on a reported basis (7 percent in constant currency).*

As our business accelerated, we stepped up investments in our brands

with incremental spending behind the global Live in Levi's? advertising

campaign, the new Dockers? Always On campaign (supporting the Smart

360 FlexTM launch) and our ecommerce business. In part because of these

incremental investments, our reported adjusted EBIT finished flat versus

prior year.**

CHIP BERGH

Our strategies are working. Today, we have a more diversified business than we did five years ago. We are unlocking growth in categories that

President and Chief Executive Officer

have high growth potential to offset some of our low growth businesses.

Our balanced portfolio delivered 9 percent growth for the Levi's? brand

for the full year ? across every channel, in all three regions and across men's, women's, tops and

bottoms. Our international business is now 52 percent of our total business, which is the largest it's

been in a decade. Our direct-to-consumer business is now 30 percent of the total company and grew

double digits in 2017. Our Levi's? women's business, which relaunched in 2015, has grown 10 quarters

in a row, with double-digit growth in five of those quarters. Our tops business grew 35 percent last

year, driven by the Trucker jacket, which celebrated its 50th anniversary, and our Levi's? Batwing T-shirt,

which has become a fashion item in many markets around the world.

We have strengthened the financial health of our business and continued to increase shareholder value. Our net debt is the lowest it has been since 2000 at $444 million and is less than half of what it was five years ago. We have $1.4 billion in available liquidity and have stepped up dividends annually, delivering $70 million in 2017. Our stock price at the end of the year was $87.25 per share, which represents a more than 26 percent increase over the valuation in December 2016.

Finally, our momentum was strong as we closed out the fiscal year, with revenue up 13 percent on a reported basis in the fourth quarter (11 percent in constant currency) and adjusted EBIT up 7 percent.** Growth remained balanced, with all three regions and all channels growing in Q4.

* All revenue growth commentary is referring to constant currency unless otherwise noted. ** See our fourth quarter & fiscal year 2017 earnings release which is available on for a reconciliation of GAAP financial

measures to the following non-GAAP financial measures: adjusted EBIT, net debt and free cash flow.

LS&CO.

FISCAL YEAR 2017**

NET REVENUE*

+7.0% +1.8% +2.6% +1.2% +3.1% 2013 2014 2015 2016 2017

GROSS MARGIN

50.2% 49.4% 50.5% 51.2% 52.3%

2013 2014 2015 2016 2017

ADJUSTED EBIT

$467M $504M $479M $480M $481M

2013 2014 2015 2016 2017

FREE CASH FLOW

$292M

$284M

$158M $123M $81M

2013 2014 2015 2016 2017

* All revenue growth commentary is referring to constant currency unless otherwise noted. ** S ee our fourth quarter & fiscal year 2017 earnings release which is available on for a reconciliation of GAAP financial

measures to the following non-GAAP financial measures: adjusted EBIT, net debt and free cash flow.

Here are some of the key highlights and opportunities from this year, mapped against our four strategic priorities:

GROW OUR PROFITABLE CORE

Our core business is comprised of Levi's? men's bottoms globally; Dockers? men's bottoms in the US; our top ten wholesale customers and our five largest mature markets: the U.S., France, Germany, Mexico and the U.K. These large, well-developed businesses generate high revenue, cash and earnings, but the majority of them are expected to be low growth.

This year, our core business performance has been mixed. Our men's total bottoms business declined 2 percent, driven by a 17 percent decline in Dockers? men's bottoms, while the Levi's? men's bottoms business was flat. We are addressing the Dockers? business and launched the Smart 360 Flex Khaki this year, which has shown promising early results.

Our U.S. business grew 2 percent this year, which is notable given the current challenges with the U.S. wholesale environment. Our U.S. wholesale business was flat, despite roughly 300 door closures amongst our largest customers, making this a pretty significant achievement. The other top mature global markets outside of the U.S. -- France, Germany, Mexico and the U.K. -- collectively grew 13 percent. These teams have been disciplined and focused, working to seize opportunities and raise the bar for success.

EXPAND FOR MORE

The businesses in this category are underdeveloped businesses with significant growth potential, which include women's, tops, the value segment, and from a geographic standpoint, China, India and Russia. Our focus on these businesses over the last five years has helped to diversify our portfolio and position Levi's? as more of a lifestyle brand.

The Levi's? brand strengthened its connection with a younger demographic, and I'm especially proud of our most recent ad for the Live in Levi's? campaign, "Circles." This piece garnered more than 1.6 billion impressions across TV, digital, social and cinema since it aired in September, and it was one of the top-10, most-viewed ads on YouTube in 2017.

The Levi's? Women's business grew 24 percent this year, with growth across all regions and channels, fueled by the success of the 700 series and healthy sales of tops. Women's has now crossed $1 billion in sales and represents nearly one quarter of our global business.

Our overall Tops business continued to deliver, growing 35 percent for the year, led by the iconic trucker jacket, and our branded T-shirt business. This included strong sales of our Levi's? Batwing tee, which was a runaway success around the world this year. Our Tops business has a lot of potential, and we will continue to expand it in 2018.

In the value segment, Signature by Levi Strauss & Co.TM and Denizen? collectively grew more than 20 percent this year. Both brands delivered growth in men's, women's, and kids and we've gained additional floor space within our current retailers, as well as new doors. These value brands are an important part of our strategy to expand for more, helping us reach an important consumer segment and diversify our business.

And we made progress in our key international growth markets, with 3 percent net revenue growth in China, 8 percent in India, and 9 percent in Russia. In China, we're focused on improving partner profitability, pricing and product assortment while strengthening brand engagement both in store and online.

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