Levi Strauss & Co. is on something of a roll — and Michelle Gass, president and chief executive officer, is looking to keep it going.
Organic sales grew by 7 percent to $6.2 billion for the fiscal year ended Nov. 3 — on top of a 3 percent increase in 2024. This year, sales are expected to grow by another 4 to 5 percent.
The challenge, of course, is maintaining the momentum.
“We are very pleased with 2025,” Gass told WWD in an interview. “I would say it marked a true inflection point for the company and our sharpened focus. We made a number of moves [that] have unlocked stronger, more profitable growth. Record gross margin for the year. We expanded our EBIT margin and delivered high-single-digit growth EPS.”
Earnings per share took a slight dip in the fourth quarter, but Gass clearly feels that the Levi’s business is responding in all the right ways.
“Where we’ve been leaning in, women’s tops and DTC, they all outperformed,” she said.
Levi’s has been in transformation mode for a while, building up its own e-commerce and brick-and-mortar businesses, expanding in tops and women’s. It also has the still small, but quickly growing, Beyond Yoga and, in July, sold off the long-struggling Dockers brand to Authentic Brands Group in a $311 million deal.
Adjusted earnings per share slipped to 41 cents in the fourth quarter — down from 49 cents a year earlier, but were 3 cents ahead of the 39 cents Wall Street had penciled in, according to Yahoo Finance. Operating margins stayed flat at 11.9 percent and net income tallied $158 million.
Revenues for the three months ended Nov. 30 rose 1 percent to $1.8 billion, with a 5 percent gain on an organic basis.
“The brand is as relevant as ever,” Gass said, referring to its work last year with both Beyoncé Knowles-Carter and Shaboozey as well as its increased focus on sports this year, with the Super Bowl being held in Levi’s Stadium in Santa Clara, Calif.
Inside the new store Levi’s opened in Milan.
Courtesy of Levi’s
The brand will launch its next brand campaign with its first Super Bowl commercial in 20 years.
“We’re really entering 2026 from a position of strength,” Gass said. “Our key strategies are working. And this is all about execution. So being a brand-led company, center of culture, this pivot we’re making from being a denim’s bottoms business to head-to-toe denim lifestyle. There is just such a runway ahead of us.”
Levi’s plans to grow its store count by 50 to 60 new doors again this year. Beyond Yoga is also at the early part of its growth curve.
“Our expectation is, that carries us right through to becoming a $10 billion company and a much more profitable company at 15 percent” operating income, the CEO said.
Levi’s organic sales in the Americas grew 2 percent during the quarter while Europe was up 10 percent and Asia gained 4 percent.
The direct-to-consumer business, which made up 49 percent of the company’s overall revenues in the quarter, drove organic sales up 10 percent, with e-commerce up 22 percent.
Organic wholesale sales were flat for the quarter. And the Beyond Yoga brand continued its growth spurt with a 45 percent organic sales gain.
To sustain its growth and keep building, Levi’s needs to continue to execute on Gass’ vision of the future.
“The good news is the strategies are in place,” she said. “As we look out, we use an expression called ‘the microscope and telescope.’ As we look at the telescope, we see ourselves as a $10 billion best-in-class retailer. Our business is already now half direct-to-consumer. We are a retailer.
“The microscope is, every single day we’re tracking our performance,” she said. “We are maniacally focused on taking care of our fans and showing up every single day in our stores, online and with our customers. Wholesale is still important to delivering to our best ability. We have better tools today. We are really leaning into AI.”
In November, Levi’s teamed with Microsoft, developing a “super-agent” that employees are using to diagnose system inefficiencies and then prescribe and implement solutions.
“Our intention is to use things like AI to manage our costs, keep our headcount relatively flat,” Gass said. “So it creates capacity. It’s an enabler. It’s an amplifier to human intelligence. We subscribe to that school of thought. We also see it as a way to enhance the consumer experience.”
Noticeably absent from the conversation was any real hand-wringing over tariffs increases, even though they’ve taking their toll and the company’s projections assume U.S. imports from China continue to carry 30 percent tariffs and the rest of the world stays at 20 percent.
Harmit Singh, chief financial and growth officer, said those costs are being offset by Levi’s momentum.
“That’s enabling us to reach out to more consumers,” Singh said. “We also have pricing power and we have been able to take pricing.
“Because of the volume leverage a leader like us has, we’ve been able to work with our vendors, especially as we rationalize skus and drive more assortment productivity and get lower product costs,” he said.
Cotton prices have also helped and, as Gass said, AI is leading to cost efficiencies.
Shares of the company, which have risen 11.5 percent over the past year, slipped 1.4 percent to $20.18 in after-hours trading on Wednesday.
