Momentum has bought to rely for one thing — in sports activities and style.
“We had a robust quarter,” stated Michelle Gass, president and chief government officer of Levi Strauss & Co., in an interview on first-quarter outcomes. “[Organic] gross sales up 9 % kicks off 2025 in a really robust approach. However not solely gross sales, our margins have been up. It’s one other proof level that our transformation is working.”
However that is additionally a type of moments when the previous has a lighter grip on the current and the long run is all of the extra unsure.
U.S. President Donald Trump moved on from sniping at China to launching a world commerce struggle final week, including on 10 % tariffs on items from practically each different nation. And a few have been hit with a lot larger charges together with China, which is being hit with a further 34 % tariff.
“It’s dynamic, it’s new, it’s fluid and it’s altering,” Gass stated of the enterprise local weather. “We — and your entire business — are dealing with an incredible quantity of uncertainty at this second.”
Along with some momentum, Levi’s has been reducing prices because it strikes to a stronger direct-to-consumer stance and can also be cushioned by its worldwide enterprise, which accounts for 60 % of gross sales.
Levi’s sources from 28 nations, together with China (which accounts for just one % of product), Mexico (5 %) and Vietnam (a single-digit proportion). The remainder of Levi’s items come principally from different nations in Asia.
However there’s actually no international provide chain in style that would skirt Trump’s tariffs.
Levi’s arrange a process power to know how the commerce change would hit its enterprise and the way it might mitigate the affect.
“We’ve already been on the trail to enhance the structural economics of the enterprise,” stated Gass, referring to work that has seen Levi’s reduce prices over the previous 12 months or so. “We’ll look to speed up that after which we’ll work with all of our companions. And if we do take pricing, we’re going to try this very surgically. No selections have been made.”
The pace of occasions on the bottom — Trump, as an illustration, threatened China with one other 50 % tariff on Monday — makes it arduous to choose any determination.
So for now Levi’s, like the remainder of style, is planning and watching the market intently.
First-quarter gross sales rose 3 % to $1.5 billion, however have been up 9 % on an natural foundation, which excludes foreign money fluctuations, the closed footwear and Denizen companies and the Dockers enterprise, which is now categorised as a discontinued operation.
Web earnings tallied $135 million, or 34 cents a share, up from losses of $10.6 million, or 3 cents a 12 months earlier. Adjusted earnings per share have been 38 cents — 10 cents forward of the 28 cents analysts had penciled in, in line with Yahoo Finance.
Levi’s ended the quarter with $574 million in money and whole liquidity of $1.4 billion.
Harmit Singh, chief monetary and development officer, known as that “an excellent spot” to be in.
The corporate is holding Dockers on the market and was stated to be in unique talks with model administration agency Marquee Manufacturers. However sources stated that interval of exclusivity expired simply because the market hit its tariff disaster, making it troublesome to worth the model within the present atmosphere.
“It’s a aggressive course of,” Singh stated of the Dockers sale. “There are a few potential patrons. We’re in the course of the sale course of and it’s confidential proper now.”
He stated the corporate was assured {that a} deal would shut “someday in 2025.”
If the uncertainty available in the market has sophisticated the Dockers sale, Gass stated Levi’s mission was nonetheless clear regardless of a unstable world.
“There’s uncertainty at instances like these,” the CEO stated. “Levi’s is the kind of model that individuals will go to. They will go to manufacturers that they belief, and we stand for the issues which are actually vital in unsure instances, which is high quality, worth, caring for our shopper. We’re going to proceed to concentrate on nice execution and function towards our playbook. That playbook is working.”
