Levi Strauss revenue jumps as DTC exceeds 50% of sales
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- Levi Strauss saw revenue jump 14% to $1.74 billion, beating Wall Street expectations of $1.65 billion.
- DTC sales now account for 52% of overall revenue, a first for the company, with CEO Michelle Gass anticipating this trend to continue throughout the year.
- Higher prices and positive foreign exchange contributed to about half of Levi's growth, according to outgoing CFO Harmit Singh.
- Levi's full-year sales guidance was raised to between 5.5% and 6.5% growth, largely ahead of estimates, though adjusted earnings per share guidance of $1.42-$1.48 is shy of some expectations.
- Potential tariff reductions could boost full-year earnings by $35 million (7 cents per share) if a 10% tariff remains, and the company could receive an $80 million refund from previous tariffs, as noted by Harmit Singh.
- Consumer spending has not shown a pullback despite higher gas prices, with Levi's value brand Signature up 16% and middle market Red Cap up 9%, indicating broad demographic reach, per CEO Michelle Gass.
Why it matters: Levi Strauss's DTC strategy, now over half of sales, could boost full-year earnings by $35 million if tariffs remain at 10%.
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