Michelle Gass, the CEO of Levi Strauss & Co., is making a notable impact on the brand as it continues to navigate a challenging retail landscape. After just over a year in her role, Gass reported strong performance in the second quarter, exceeding both sales and profit expectations. The denim company is now optimistic about its full-year outlook.
During a recent interview, Gass attributed Levi’s success to the strength of its iconic brand, which has been reinforced by initiatives such as a collaboration with Nike and a high-profile advertising campaign featuring Beyoncé Knowles-Carter. Levi’s is undergoing a transformation into a direct-to-consumer, denim-focused lifestyle retailer, with direct sales now accounting for 50% of its business and a growth rate of 10% in this segment.
The company’s revenues for the second quarter rose 6% to $1.4 billion, with a substantial net income of $80 million. Adjusted earnings also saw a significant increase, surpassing Wall Street expectations and prompting a rise in the company’s stock price.
Gass emphasized the importance of both the direct-to-consumer and wholesale sides of the business, noting that the latter has also seen a 7% rise in organic sales. She expressed confidence in the resilience of consumers despite an uncertain economic climate and promised that the company aims to evolve beyond jeans into a comprehensive denim lifestyle brand, targeting a revenue goal of $10 billion.
Levi’s’ increase in its annual growth forecast underscores its positive trajectory. The company has adjusted its organic revenue growth expectations from a previous range of 3.5%-4.5% to 4.5%-5.5%. Furthermore, adjusted earnings per share predictions have been raised by 5 cents.
Despite the ongoing uncertainties caused by trade tariffs, which are expected to influence their financial performance by reducing gross margins, Levi’s is focusing on strategic negotiations with vendors and managing costs effectively. The company’s reliance on international markets for 60% of its revenue could mitigate some impacts.
Overall, Gass’s leadership signals a promising future for Levi’s, demonstrating the brand’s ability to adapt and thrive even in challenging conditions, thus inspiring hope for continued success in the evolving retail market.