Levi Strauss Warns of Delay in Achieving $10 Billion Sales Goal – Report

Levi Strauss has indicated that the timeline for reaching its $10 billion revenue target has been extended due to the financial pressures faced by Western consumers, as reported by the Financial Times.

In spite of these challenges, the company is committed to opening hundreds of new stores and increasing its appeal to women.

CEO Michelle Gass stated that the goal of achieving revenues between $9 billion and $10 billion, originally slated for 2027, has been postponed due to disruptions within the industry. For the fiscal year ending in November 2023, Levi’s announced annual revenues of $6.2 billion, with net income dropping to $250 million, down from $569 million the previous year.

Gass, who took over as CEO in 2023, noted that the company would reevaluate its revenue targets and provide a more detailed timeline in the future. Harmit Singh, Levi’s chief financial officer, mentioned that any updates on timing would come in approximately a year, suggesting a delay of a few years largely due to “consumer pressures” in Western markets. However, he pointed out that wealthier consumers in the U.S. are in a more favorable position.

The report indicated that while U.S. shoppers who earn over $100,000 remain Levi’s primary focus, more budget-conscious consumers are still struggling. Additionally, European consumers are showing increased caution, even as inflation decreases more quickly than in the U.S., whereas demand in Asia and Latin America is stable.

Gass expressed optimism about ultimately achieving the $10 billion target, highlighting growth potential across different segments. The company plans to diversify its offerings, including dresses and non-denim products, particularly aiming to attract women, who currently represent only a third of its sales. Gass is working toward gender parity in sales and an expanded product range featuring skirts and jumpsuits.

Levi’s, renowned for its iconic 501 jeans, aims to open 500-600 new stores globally over the next few years in regions such as Asia, Latin America, and Europe. Gass underscored the importance of maintaining wholesale partnerships alongside a direct-to-consumer approach.

Since going public in 2019 and with a market capitalization around $8 billion, Levi’s has encountered challenges, including stagnant revenue growth. Under Gass’s leadership, the company is focused on modernizing its business model, shifting from a primarily wholesale-centric operation to one that is more consumer-oriented, while also expanding its premium offerings, such as bespoke jeans available at exclusive locations like its new “Haus of Strauss” in Paris.