Levi CFO on Revenue Growth, Tariffs, and Brand Strength

Financial Outlook and Growth Drivers

• 🚀 Levi Strauss & Co. raised its full-year revenue outlook, now expecting 1% to 2% sales growth, a significant improvement from the previously projected decline.
• 📈 The company reported its third consecutive quarter of high single-digit growth and increasing profitability, driven by both direct-to-consumer (DTC) and wholesale channels.
• 🎯 Growth is fueled by a laser focus on the core Levi's brand, successful expansion into new product categories, and a resilient consumer.

Navigating Tariff Uncertainty

• ⚠️ Levi Strauss & Co. is managing the impact of tariffs by assuming an incremental 10% on goods from the rest of the world and 30% from China.
• 🌍 With 60% of its business international, the company leverages a diversified supply chain and agile vendor relationships to mitigate tariff effects.
• 🤝 Mitigation actions include targeted pricing adjustments, supply chain diversification, and vendor negotiations, aiming to protect consumers from bearing the full cost.

Brand Momentum and Consumer Resonance

• 🌟 The Levi's brand is stronger than ever, resonating particularly with millennials and Gen Z, and experiencing accelerated growth in women's and new categories.
• 🎤 A significant partnership with Beyoncé has been instrumental in accelerating the growth of the women's business, which has doubled in recent years and is targeted to become half of the company's total business.
• 🛍️ The company is focusing on creating memorable moments for consumers, such as customized products and collaborations like the one with Nike for denim sneakers, which have seen high resale values.

Direct-to-Consumer and Wholesale Strategy

• 💻 Levi's e-commerce business is now profitable, contributing to the overall DTC success which has seen 13 consecutive quarters of comparable sales growth.
• 🏪 The company is expanding its physical retail presence by adding 50-60 stores annually to its existing 3200 locations.
• 🔄 Wholesale partners are gaining confidence and increasing orders by observing the successful new product introductions and performance in DTC channels, demonstrating the synergy between the two strategies.