It is now my pleasure to turn today's meeting over to Mr. Steve Neal, Chairperson of Levi Strauss & Co. Mr. Neal, the floor is yours.
Thank you very much. Good morning, everyone. I'm Steve Neal. I welcome all of you to Levi Strauss & Co.'s 2020 Annual Meeting of Shareholders. We are hosting today's meeting through a virtual online platform for the first time. Like many other companies, we are meeting online to comply with the city's shelter in place mandate for health and safety reasons as we deal with the COVID-19 pandemic.
However, I do believe that even under normal circumstances, a virtual meeting affords us the opportunity for increased engagement with our shareholders because they can join regardless of where they are located. With that in mind, I want to thank you all for taking the time to join us, and I hope you all are safe and well, and that your families are safe and well.
While the meeting is virtual only, shareholders that have completed an online registration will have the capability to submit questions online. Guests attending this meeting are in listen mode only. At this time, I would like to take the opportunity to introduce you to the members of the Levi Strauss & Co. board, shown here on the screen.
In addition to myself, the board consists of Chip Bergh, President and CEO of Levi Strauss & Co., Troy Alstead, Jill Beraud, Bob Eckert, Spencer Fleischer, David Friedman, Yael Garten, Chris McCormick, Jenny Ming, Pat Pineda, and Joshua Prime. I also want to note that since our last annual meeting, we have had two new directors join our board. Yael Garten is the Director of Science and Engineering at Apple, and Joshua Prime is a partner at Indaba Capital Management.
I'd like to thank all of our board members for their dedication and willingness to serve on the board. They are all online today for this meeting. I thank them all for participating online. So too, is our entire management team. In a few minutes, you'll hear from our President and CEO, Chip Bergh, and from Chief Financial Officer, Harmit Singh. You will also hear from our General Counsel, Seth Jaffe. In the meantime, let me begin with the agenda.
The agenda will essentially have two parts. We'll start with the formal portion of the meeting to satisfy legal requirements. After the formal portion of the meeting, we'll move to the second part of the meeting for the business updates from management. With that in mind, let me now turn the meeting over to our General Counsel, Seth Jaffe, for the formal business of the meeting. Seth, over to you.
Thank you, Steve, and good morning, everyone. I want to also extend my wishes to you and your families for your health and safety. Just a few reminders before I go into the proposals. First, this meeting is being recorded and will be available for the next 30 days on the meeting center site you accessed today.
Second, if you have not previously voted your shares, shareholders that have previously completed an online registration may vote online prior to the closing of the polls. The polls will be closed for voting after I go through each of the proposals to be voted on. Last, our business review will include forward-looking statements. This is a standard reminder that will be put up on the screen that actual results could differ from those presented today.
You should refer to our filings with the SEC, including our annual report and the quarterly report that we filed yesterday, for certain risk factors that could lead to actual results that differ from our projections. Now we will move to the formal business. A representative from Computershare, who is acting as Inspector of Election, is present online.
The Inspector of Elections has reported that more than 92% of the votes eligible to be cast at this meeting are present or represented by proxy. Therefore, we have a quorum, and we may proceed. There are three proposals to be considered today. The first is the election of our four class I directors to serve until the 2023 annual meeting and until their successors are duly elected and qualified. The nominees for class I director are Jill Beraud, Spencer Fleischer, Christopher McCormick, and Steve Neal.
The second is the proposal to approve, on an advisory basis, the compensation paid to the company's named executive officers. Shareholders have been asked to approve, on an advisory basis, the following resolution. Resolved, that the compensation paid to the company's named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation discussion and analysis, compensation tables, and narrative discussion is hereby approved.
The third item of business is the ratification of the selection by the Audit Committee of the board of directors of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending November 29th, 2020. I now declare the polls closed. The Inspector of Elections has provided us with the preliminary results and confirmed that we have received the necessary votes required to pass the following.
One. Each of the four nominees for election as Class 1 directors has been elected to serve a three-year term expiring at the 2023 annual meeting. Two. The advisory approval of executive compensation has passed. Three. The appointment of PricewaterhouseCoopers as the independent registered public accounting firm for Levi Strauss & Co. has been ratified. This concludes the formal portion of the meeting. Chip Bergh will now provide a business update. Chip?
Thank you very much, Seth. Welcome to everyone. Thank you for joining us today in this virtual shareholder meeting. I appreciate our leadership team and shareholders coming together virtually, and I hope that everyone has been able to stay safe and healthy during this incredible time in the world's history.
I am joining you all from my home office, where I have been hunkered down now for the last almost four weeks. Though I wish we were able to meet in person, I continue to be encouraged by how all of us at Levi Strauss & Co. continue to stay connected to each other, to the company, and to our consumers all over the world.
When we first started working on the annual report and the shareholder meeting, I expected that today we would be focusing on the remarkable growth in recent years that the company has delivered, including the strong results that we saw in 2019, and especially the very strong numbers from the first quarter of 2020 that we reported out yesterday on our Q1 earnings call.
This meeting comes at a time that is anything but ordinary, so our agenda can't be business as usual either. We are navigating a truly unprecedented global crisis. The consequences will be fully seen or felt for months to come. We're not waiting to act. Right now, we are already doing everything we can to meet the moment and focus on all the things that we can control in the wake of this global health and economic crisis.
I want to use my time with you today to share why I am very optimistic about our future, and discuss what we're doing right now to be on offense in the short term and best set us up for the long term. From our history to our team to our unique strengths as a company and a brand, we are better positioned than most other companies in our industry to emerge stronger on the other side of this crisis and to thrive again.
First of all, we have something that nobody in our industry can claim. A company with a history of over 167 years, in which we have persevered through tough times, some potentially even more existential than what we're currently facing. We've been through two world wars, the Great Depression, the 1906 San Francisco earthquake in our hometown, natural disasters, and even the flu pandemic of 1918.
Through all of them, LS&Co. has proven itself to be a company that is built to last. We've faced tragedy, hardship, and great strife that have, each one of them, challenged the business. In each of these cases, we used that time of crisis to galvanize a path forward, and we will do it again. We've not just survived, we've thrived by staying true to the values that have shaped our business from day one, while adapting and innovating to compete in a changing industry and refining the strategies that have kept our company strong for going on two centuries.
We've built an iconic and lasting brand, known for quality and durability, while at the same time driving many decades of trends with our product. We're managing through this difficult time by coming together, solving problems, and doubling down on our strengths, not playing defense. I believe that crisis presents an opportunity, and we have everything we need to not just renew our business, but to reset it for the future.
We are committed to coming out of this stronger than we went into it. Our leadership team is another big reason for my confidence in this company. They are also joining us virtually on today's webcast. This team represents a deep bench of outstanding leaders who have a track record of making tough decisions to protect the business and push it forward.
As I often say, I would put my team up against any leadership team out there. Together, this team has made us a more global and diversified company. As we saw in our 2019 and early 2020 performance, their collective leadership and contributions have led to strong and sustained financial returns for the company.
This team will do what it takes to secure the long-term health of the business, taking swift action, making hard calls, bringing creative solutions to the table, and helping us navigate this period of uncertainty with creativity and integrity. I am always very grateful to have their leadership, but that is especially true during this critical moment in our company's history.
As I said, the leadership team and I are laser-focused on playing to our strengths, doing everything we can to mitigate the impact of the pandemic in every way possible, and capitalizing on opportunities so that we come out stronger. We had a great first quarter of this year that reaffirmed once again that the four core strategies we have in place that we've been executing against for eight years are working and working well.
Beyond the strength of the business leading into the crisis and the strength of the underlying strategies that have created that momentum, here's why I'm so confident that we will persevere through this challenging time. First, our brands and the deep loyalty consumers feel for the Levi's brand, in particular, have a staying power that provides an important foundation for our continued success.
The Levi's brand is one of the most iconic, most loved brand names in the world and is arguably stronger globally today than it has ever been. For decades, Levi's has been known as a wardrobe staple and a cultural mainstay, and consumers will come back to the brands that they love and trust the most.
Even amidst the crisis, we have continued to invest in the close bond we have with our fans, finding ways to connect with them, even in isolation, whether that's through our live 501 virtual concert series or with our recently launched Levi's brand mobile app that gives fans another way to engage with the brand and shop in a new format. The second reason is the strength of our balance sheet.
With $1.8 billion of liquidity, that gives me confidence that we will be able to navigate this crisis in the short term and get back to bigger gains in the long term. Our people spend more time speaking about this in just a few minutes. Third, because of our continued investment in diversifying our business model, we have been successful accelerating our business across geographies, channels, and categories.
When I first joined this company in 2011, we put in place our four core strategies, protect and grow our profitable core, expand for more, become a leading omni-channel retailer, and achieve operational excellence. Taken together, these strategies have contributed to the growth and diversification that makes us less vulnerable to the fallout that may be felt from this crisis.
For instance, our DTC business, or direct-to-consumer business, is now more than 40% of our total business, up from under 30% five years ago. Our e-commerce business is now our fastest-growing business. Fourth, we have built a global operating infrastructure with a nimble and diversified supply chain that allows us to quickly account for any necessary shifts or changes in production.
Our supply chain and logistics teams have been working since the onset of the crisis to understand and negate potential impacts, staying in constant communication with our suppliers. We have full visibility into our inventory across all stages of our supply chain. We are working proactively, leveraging the strong relationships we have with our suppliers and customers around inventory levels and have aggressively cut purchases and canceled orders for the second half of 2020. Fifth, we continue to lead our industry with a culture of innovation.
We are fast-tracking new technologies to drive efficiency, speed to market, reduce waste, and improve operations through and beyond the current crisis. Levi Strauss invented the blue jean as we know it, and in the years since, innovation has continued to be an important part of our DNA. In 2018, we introduced Project F.L.X., a new operating model that redefines the way jeans are designed, made, and sold.
Today, FLX is giving us an advantage in helping us manage inventory and allowing us to bring newness when stores reopen, regardless of when that is. More recently, we accelerated the rollout of photorealistic 3D renderings of denim garments and samples, a technology developed in our Eureka Innovation Lab that enables us to sell to merchants from images rather than physical samples. We leveraged this technology in our most recent line assortment meeting.
Normally, this meeting brings around 100 merchants and marketers to our San Francisco headquarters from around the world, and that is followed by cascading meetings over multiple weeks as they cascade the line through their regional and local counterparts. By leveraging this digital technology to hold the meeting virtually as a result of the crisis, we were able to engage everyone simultaneously and complete the process in one meeting, taking weeks out of our go-to-market cycle.
This technology and others like it will drive efficiency, speed to market, and reduce waste while improving our operations through and beyond the current crisis. We continue to develop and leverage digital tools throughout the organization that bring us closer to our fans.
Our focus on creativity and invention takes on new meaning in the current environment and will allow us to adapt quickly and find new ways to make and design our products and reach consumers. Finally, we remain committed to being a values-driven company, which is more important than ever right now.
Even as the coronavirus forces us to adapt plans and forecasts, it reminds us that it's critical to hold true to our profits-through-principles approach. LS&Co. has always been a values-led company. It drives us to innovate on more sustainable products and practices, and even as we make hard choices to secure our business during this crisis, to do all we can to support our people as they feel its impact. Our history tells us that by staying true to our values and who we are, by putting people first, we will continue to thrive over the long term.
Everything I've touched on, from our heritage to the strength of our values, strength of our brand, and our balance sheet, has all informed how we are addressing COVID-19. Throughout this crisis, the health, safety, and well-being of our employees, consumers, and the communities where we operate have been our top priority. That continues to be true and will always be true.
Supporting our communities through tough challenges is nothing new to LS&Co. We have a legacy of leadership and doing the right thing, we're taking steps to fulfill that responsibility again. Our response to the COVID-19 impact will evolve as the crisis continues to play out. To start with, we've announced a $3 million philanthropic fund to support employees, the most vulnerable in our communities, and apparel workers in our supply chain.
We're facilitating virtual volunteer opportunities for our employees and launched a three-to-one employee giving campaign that has already raised more than $215,000 to- date for a wide range of organizations that are filling critical needs related to the pandemic. We're also taking swift and important actions across the business as we deal with the economic fallout of the coronavirus.
As of March 16th, all of our owned and operated stores in the U.S. and Canada have been closed and remain closed today. In fact, globally, about 70% of all of our stores are closed around the world. We made this decision to protect our employees, our consumers, and our communities, and we will reopen our stores based on the advice of public health officials and when it makes sense, given local circumstances.
We have reopened our stores in China, and we're already seeing encouraging signs of consumers coming back and the business beginning to rebound. At the same time, we have oriented all of our business priorities around cash preservation and maintaining our strong balance sheet position by cutting non-essential costs. We have suspended our share buyback program and have drawn $300 million from a credit agreement as a precautionary measure.
We are reducing all spending across discretionary projects and reevaluating store rollouts. We've introduced a hiring freeze, we've deferred all non-essential projects, and we are cutting back on advertising and promotion. We're also asking corporate employees to take their paid time off, and we've implemented temporary salary cuts for our leaders. As CEO, I will forego 50% of my salary.
The board is forgoing their cash component of their compensation, all of this for the next three months. We will reevaluate these actions as the business begins to recover. Finally, perhaps most difficult, have been the actions we've taken with respect to our store employees. We announced earlier this week that we furloughed all U.S. hourly retail employees and our wholesale merchandise coordinators.
This was not easy. It never is. These are our front line, our colleagues, and they're valued and respected members of the LS&Co. community. I want to be clear that our actions are guided by our values. We are balancing the need for near-term reductions to our cost base with the need to do it right and do it right by our people in an empathetic and thoughtful way so we can emerge from this crisis as a strong business and employer of choice for the long term.
We will continue to take a proactive and aggressive approach to managing costs. While these are hard decisions, these are tangible ways we can all contribute to the collective effort of protecting the business and ensuring we are around for another 167 years. With that, I'll turn it over to Harmit. Harmit?
Thank you, Chip. I hope all of you, your families, and your loved ones are safe and healthy. Over the past several years, our financial strategies have focused on generating returns for our shareholders through a consistent track record of strong results. We have driven top-line growth fueled by diversification in areas like tops and women's, while staying disciplined as we invest in the business, maintaining a healthy balance between reinvestments and returning cash to our shareholders.
While we could not have predicted that a global pandemic like COVID-19 would disrupt our business operations and the industry at large, our financial strategic objectives remain, and they will serve us well throughout the crisis. We are well-positioned to respond over the coming months with a specific focus on profit protection and cash preservation. We are cutting costs in non-essential business operations. We have suspended our share buyback program.
We have drawn $300 million from our credit revolver as a precautionary measure. Since 2015, our revenue growth has averaged 6% annually, including 2019, when revenue was up 6% in constant currency. We have expanded our gross margin by over 300 basis points since 2015, while growing Adjusted EBIT in line with revenue. Adjusted net income has increased by an average of 16% per year over the past four years.
In addition to the strong earnings, we have dramatically improved the balance sheet. As I like to say, what needs to go up is going up. What needs to go down is going down. Our $1.8 billion liquidity has nearly doubled in recent years, mostly due to $600 million more cash on the balance sheet. Meanwhile, we've reduced debt and substantially improved the company's leverage.
The leverage ratio has declined from 2 x in 2015 to 1.4 x at the end of 2019. Turning to the results we declared yesterday. With respect to our first fiscal quarter of 2020, as we mentioned on our earnings call yesterday, it was a great quarter. We delivered strong revenue growth, a record high gross margin, and adjusted diluted EPS ahead of our expectations. All in spite of the initial effects of COVID-19, primarily in Asia.
First quarter net revenues of $1.5 billion grew 6% in constant currency, in spite of the $20 million coronavirus headwind, which adversely impacted Asia. China's growth had been really strong before the virus hit. We were really pleased with how our turnaround was going there. Gross margin increased by 110 basis points to 55.7%.
This was a great achievement, a record high for the company, and demonstrates how our strategies have been delivering improved structural economics. Adjusted EBIT declined, but this was entirely due to us bringing advertising spend forward, the timing of recognition of equity incentive expense, and a $10 million adverse impact of the COVID-19 outbreak.
Despite Adjusted EBIT being down, adjusted net income grew due to a lower tax rate. In summary, prior to the coronavirus, our business trends and financial results were really strong. Even in the current situation, we remain a strong, purpose-driven company with powerful, iconic brands. In the coming months, we will respond by managing through this crisis, and I'm confident about our long-term growth opportunity once this is behind us. Back to you, Chip.
Thanks, Harmit. I just want to say, I truly value the partnership and relationship that Harmit and I have, and he's helping me navigate us through this in an exceptional way. As Harmit just explained, our fiscal year was off to a strong start. We exceeded expectations in Q1, and we were set to deliver another year of strong, profitable growth.
Now we're facing this global crisis unlike anything anybody has seen in their adult life. No matter what happens next, I expect that the remainder of this fiscal year, and perhaps even into next fiscal year will be a challenge. With all of that in mind, I continue to be very optimistic that we will remain a winner in our industry.
I'm confident in the Levi's brand that has never been stronger, our balance sheet, our skilled and talented leadership team, and the broader organization, our culture of innovation, and the four key strategies that have transformed this business over the last eight years and provide us with a path forward.
As I've said before, this is a company built to last. We've spent more than 167 years proving time and time again that we know not just how to survive a moment, but we know how to thrive for generations to come. In the same way that we pulled through previous times of uncertainty and challenge, we will do so again by leveraging what makes us strong and seizing new opportunities to make us even stronger. With that, operator, I believe we can open the meeting to questions from our shareholders.
We'll answer as many questions as we can during the meeting. If we can't get to all of them, we've made a commitment that we will address any remaining topics on our website following the meeting in the next couple of days. I will now turn to Aida Orphan, our senior director of shareholder relations, to moderate the Q&A. Aida, over to you.
Thanks, Chip. As a reminder to those on the call, if you haven't already submitted a question, you may do so at any time by clicking on the message icon. Our first question comes from PETA. Levi's claims to be eco-conscious, yet continues to fuel the leather industry's devastating effects on our planet just for a scrap of material that bears the company's name. Animal agriculture, including leather, is a leading contributor to climate change, in part because of the massive volume of greenhouse gases that cows emit and those emitted by tanneries.
Levi's refuses to act. Cow leather is three times worse for the environment than vegan leather, and since the majority of Levi's patches are already leather-free, it should be a no-brainer to switch to using exclusively vegan leather. It's time for Levi's to stop contributing to an industry that is pushing our environment to the brink of destruction just for the sake of a brand label. When will Levi's make the environmentally imperative decision to stop sourcing animal leather, starting with its branded patches?
First of all, thank you very much for the question. I come from a place of respect for PETA and for all that you stand for. I'll start by really talking about, since the angle on this question is around sustainability, that we've really been very focused and driven around sustainability for as long as I've been here, and it actually even predates me.
Materiality and life cycle analysis have been driving our sustainability efforts and our sustainable raw material strategy. Over 90% of the raw materials used in our products are cotton. We have fundamentally focused on that critical raw material in all of our sustainability efforts through 2020 on implementing more sustainable, less resource-intensive cotton cultivation practices.
This has helped us to enable scale, water, and chemical savings practices through the entire apparel chain that help everything from cotton farmers to mills that weave the product to the factories that make our product maximize their yields and reduce their carbon footprint.
We've also brought innovative alternative fibers, like cottonized hemp, which is becoming an even bigger part of our product line to market as a part of our portfolio approach to reducing the environmental impacts of our products. Without our focus on addressing the most material impacts to our business and the environment, we would not have been able to drive this degree of progress. We are committed to sourcing all of the materials that go into our products responsibly.
For the small amount of leather that we do use, and it is a small amount, this means sourcing only from suppliers that meet our animal welfare standard and international animal welfare standards. I think the last thing I would say is the majority of our patches, as you reference in your question, are not made from leather. We've implemented a number of other non-leather alternatives, including a cotton patch for our Wellthread jeans. At this time, we do not have plans to eliminate leather entirely from our supply chain. Next question, Aida.
Our next question is from Jennifer C. Haas Investments LLC. Thank you, Chip, and your team for your leadership in face of the COVID-19 crisis. I appreciate your continued commitment to the well-being of the employees, in particular. Two questions. Will furloughed employees continue to receive health insurance, and are any other members of leadership besides the board and CEO, will they be taking salary cuts? If so, by how much?
First, almost everybody that we have furloughed from our U.S. store population are hourly employees, most of whom are not eligible for healthcare insurance. Since they weren't eligible, they're not eligible. There are some hourly employees that are eligible for other benefits, and those benefits continue as a furloughed employee. It is important, there's an important distinction.
As a furloughed employee, they are still employees of ours, so they have any benefits that go along with being an employee. The benefit for us and them is when the time comes to open new stores, that we don't have to go through the entire hiring process again. They can come back to the stores almost as if they had just been gone for a couple of days.
We don't have to do background checks and all the other things that we normally have to do when we hire somebody. They know that they've got a place to go back to when the stores reopen. That's the benefit that's in it for them. As furloughed employees, they are eligible for unemployment, both the state unemployment as well as the additional federal unemployment topper that is part of the CARES Act.
Unemployed workers will receive an additional federal unemployment grant of $600 per week. They will be eligible for that as well. As to other salary cuts, I didn't have it in my remarks, but yes, we are making cuts pretty broadly across the organization. I mentioned that the board is going to forego their cash retainer. I've taken a 50% salary cut.
My direct reports and other senior executives are taking a 25% salary cut. The rest of the executive band, which is mostly SVPs and senior vice presidents, are taking a 20% salary cut. The leader band, which is about the next 250 or so people, those would be country managers around the world and folks of that level and nature, are taking a 10% salary cut.
Below that level, we are asking employees to take two weeks of PTO, or time off, during this period of time. It's pretty broad. It impacts more or less the entire organization. As I said, I guess the last thing I would say is that we announced it as a three-month program. The board will reevaluate where we are.
That's fundamentally driven by just the uncertainty of how long is this going to continue and how much of a financial impact is this going to have on the company. I will just say, from a personal standpoint, I'm expecting that this is going to continue for some time to come. I say that in both the seriousness of the nature, but also fully expecting that this is probably going to be longer than three months. Thank you, Jennifer. Next question.
Our next question is from Christina Kiel. Can Levi's use its facilities to make personal protective equipment?
There's a short answer and a long answer to this. The short answer is to make medical grade protective clothing or equipment or masks or anything of that nature is a very, very high standard and would be very difficult for us in any of our facilities or our third-party contractors that we work with in their facilities to make something that would stand the test of being a medical grade protective clothing.
I think as most people probably recognize, the Centers for Disease Control has kind of flip-flopped on the position about masks. I think now it seems as though when we all come out of hibernation, we're probably going to be wearing masks for a long time. Those masks don't necessarily have to be medical grade masks. We do have a couple of work streams going on making non-medical grade masks for that inevitability.
Our first priority on that, by the way, is going to be for our employees. I suspect we're going to be wearing masks when we eventually get back into the office for a period of time. We're certainly going to want our frontline staff in the stores to be wearing masks. We do have work streams going against that so that we can produce masks at scale.
I wouldn't be surprised if we are selling masks in the not too distant future. We do have a very interesting work stream going on medical grade masks that is probably worth mentioning because it speaks once again to the power of innovation and our Eureka Innovation Lab and the relationship that we've built with Google over the last couple of years around innovation.
Google has a medical innovation organization, and they came to us with an idea to make medical-grade masks that have the efficacy of the famous N95 mask that nobody can find, made from a material that is already commonly available and used in other hospital settings. We are working on developing a proprietary mask with them that then could be made at scale because this material already exists.
Some folks on our team have been working with Google. We're doing the design and what the manufacturing of that might look like. We've made a bunch of prototypes already. They're working on the medical-grade aspect of it, and we expect that we'll be able to fast-track this quickly. As I said earlier, making medical-grade protective equipment has a very high threshold or bar that you have to get over.
Given the critical need and the speed with which this need exists, we're working day and night on this, and think that we might have a big breakthrough that might actually solve a very important need that's out in the world today. Fingers crossed that we can move this forward quickly and scale it quickly, and we'll take it from there.
That's a pretty amazing testimony, I think, to what the Eureka Innovation Lab has meant to us, and also to the power of innovation and the couple of really inventors that we've got. We've got some real inventors in this company, and they've built this relationship with Google, and I think it could turn into something pretty magical here. Next question, Aida?
The next question, we have two questions from Robert E. Friedman Revocable Trust. One of the pieces of our history that makes me most proud was that we retained sewing machine operators on payroll during the Depression. What similar policies today will make us proud tomorrow and enhance our brand? The second question is, what are the plans for dividends going forward?
Okay. The second question is a lot easier to answer than the first question. When we announced the Q2 dividend yesterday, in the press release and on the earnings call, we made it very clear that the third and fourth quarter dividend, we will determine, or the board will determine, what we're going to do from a dividend standpoint as we get more clarity around where our business is going to be and how this crisis is going to play out, both from a health standpoint as well as from an economic impact standpoint, and what that means for our business.
I think as everybody can probably appreciate, it's nearly impossible to forecast today what our business is going to look like at the end of this fiscal year, going into next fiscal year, because we don't know how long or how deep and how much of an impact from an economic standpoint this crisis is going to have.
On the first question, let me start by saying that I probably had more sleepless nights in the last month or so than I have in the last 10 years. I am very conscious and aware of this company's very long history and track record of not laying off employees during the Depression and many of the other great stories that this company has. I am hopeful that there will be stories like that, as a result of this crisis.
At the same time, I have to be totally straight and say my greatest responsibility is that there is a story being told 10, 20, 30, 50 years from now about the company. Survival is the very first thing on my mind, not to be overly dramatic, but as a company, we are very focused right now on coming through this crisis stronger than ever and emerging on the other side stronger than ever. Yes, we have a very strong balance sheet with $1.8 billion of liquidity, as I said. We also are generating no revenue right now or very little revenue. We have 73% of our stores around the world are closed, and most of our large wholesale customers are closed. That has been the case for over a month at this point.
When you're generating no revenue, but still have salaries to pay, rents to pay, and other fixed costs that we're responsible for, you have to take a really hard look at our cost structure. That's one piece of it. The second piece of it is, if you do the math in your head, every month, about 10% of the year goes by, and during that 10% of the year, roughly, we're generating no revenues. If we're in this situation for three or four months, we conceivably could wind up with a business that is 20%, 30%, 40%, maybe even 50% smaller than our business was a year ago, and we can't maintain the cost structure that we've got today.
The business will bounce back, I'm confident of that, and I believe we're going to gain share through this, and I believe we are going to come out of this stronger, but we're going to have to tackle costs. I think part of the cost is going to be further headcount furloughs and/or reductions. One of the things that we will always be guided by are our values and doing things very empathetically.
We have, and I talked about it a little bit, as part of this $3 million philanthropic contribution that we're making, we made a contribution to the Red Tab Foundation, which is our employees helping employees fund. That fund is designed specifically to help employees who meet an unexpected financial crisis in their life.
That Red Tab Foundation has more in the bank today than it has ever had, not because of company contributions, but because employees around the company have stepped up in a big way in making contributions to the Red Tab Foundation. The company made this donation in the last week or so because we do expect that we're going to have a number of employees who are going to be needing financial assistance over the coming months as we go through this crisis. I am extremely proud, and I will say openly, it is my charity of choice.
I've partnered with Peter Haas now for the last five or six years to run a challenge campaign to challenge employees to step up and donate to the Red Tab Foundation. That's part of the reason why the Red Tab Foundation has never been in a stronger financial place than we are today. I am very proud about what that organization does. Next question.
Thanks, Chip. It appears there are no additional questions today.
Awesome. Well, I want to thank everybody. I guess, Steve, am I kicking it back to you to close this meeting, or am I closing it?
Chip, I think you can go ahead and close it, or I'm happy to as well. I think we just want to thank everybody who attended today. I thank the management team that participated in the presentation today, and I thank everybody at the company who's dedicating themselves sort of night and day to keeping the business strong and dealing with the crisis that we're all confronting. Many thanks to all of you for attending.
That sounded like a close to me. Thanks very much, everyone, for attending.
This concludes the meeting. You may now disconnect.