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Blue jeans aren’t selling quite as well as Levi’s expected, lending more importance to the company’s efforts to expand its denim and other assortments, executives told analysts Wednesday.
“In the U.S., I would say apparel and the denim market continues to be under some level of pressure,” CEO Michelle Gass said. “And so, it's paramount for us to continue to maintain and grow share.”
That means marketing denim apparel besides bottoms and expanding sales of clothing like tops — and the company last year made strides toward those ends, she said.
“We advanced our evolution to become a true lifestyle apparel brand by rolling out a robust product pipeline,” she said. “We launched our breakthrough campaign with global icon Beyoncé, reaffirming Levi's place at the center of culture, which is driving demand across our business, especially in women’s.”
Levi’s nondenim brands had mixed results last year. Beyond Yoga, which was acquired in 2021 and runs seven stores, has driven 2% of net revenues in fiscal years 2024, 2023 and 2022, according to the company’s 2024 annual report . Last year, Beyond Yoga net revenue rose 13% year over year to $131.1 million and its other nondenim brand, Dockers, fell 4% to $323.3 million. In October, the company said it may sell Dockers , noting that it “has underperformed for some time.”
“Levi’s purchase of Beyond Yoga was a savvy acquisition, in our view,” Wells Fargo analysts led by Ike Boruchow said in a Wednesday client note.
Operationally, the company continues to fortify its direct-to-consumer channel, both online and via its own stores. Ongoing expenses associated with that are being offset by cost-management efforts, Chief Financial and Growth Officer Harmit Singh said Wednesday.
The Trump administration’s threat of tariffs isn’t an immediate concern because Levi’s sources from 25 countries, with direct sourcing from China at less than 1% and from Mexico about 5%. But that doesn’t discount their potential effect on the economy more widely, Singh said.
For the full fiscal year, Levi’s expects reported net revenues to decline 1% to 2%, though the company warned this assumes “no significant worsening of macro-economic pressures on the consumer, inflationary pressures, supply chain disruptions, potential tariffs or currency fluctuations.” Excluding currency exchanges, exiting its Denizen value brand and footwear, and the impact of a 53rd week, the company expects revenue to grow 3.5% to 4.5%.
“We are pleased with our Q4 results and the momentum into Q1 '25,” Singh said. “However, we recognize there continues to be a lot of uncertainty related to the macro environment, potential tariffs, changes in the tax code as well as worsening foreign exchange.”
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