Momentum has got to count for something — in sports and fashion.
“We had a strong quarter,” said Michelle Gass, president and chief executive officer of Levi Strauss & Co., in an interview on first-quarter results. “[Organic] sales up 9 percent kicks off 2025 in a very strong way. But not only sales, our margins were up. It’s another proof point that our transformation is working.”
But this is also one of those moments when the past has a lighter grip on the present and the future is all the more uncertain.
U.S. President Donald Trump moved on from sniping at China to launching a global trade war last week, adding on 10 percent tariffs on goods from nearly every other country. And some have been hit with much higher rates including China, which is being hit with an additional 34 percent tariff.
“It’s dynamic, it’s new, it’s fluid and it’s changing,” Gass said of the business climate. “We — and the entire industry — are facing a tremendous amount of uncertainty at this moment.”
In addition to some momentum, Levi’s has been cutting costs as it moves to a stronger direct-to-consumer stance and is also cushioned by its international business, which accounts for 60 percent of sales.
Levi’s sources from 28 countries, including China (which accounts for only 1 percent of product), Mexico (5 percent) and Vietnam (a single-digit percentage). The rest of Levi’s goods come mostly from other countries in Asia.
But there’s really no global supply chain in fashion that could skirt Trump’s tariffs.
Levi’s set up a task force to understand how the trade change would hit its business and how it could mitigate the impact.
“We’ve already been on the path to improve the structural economics of the business,” said Gass, referring to work that has seen Levi’s cut costs over the past year or so. “We will look to accelerate that and then we will work with all of our partners. And if we do take pricing, we’re going to do that very surgically. No decisions have been made.”
The speed of events on the ground — Trump, for instance, threatened China with another 50 percent tariff on Monday — makes it hard to settle on any decision.
So for now Levi’s, like the rest of fashion, is planning and watching the market closely.
First-quarter sales rose 3 percent to $1.5 billion, but were up 9 percent on an organic basis, which excludes currency fluctuations, the closed footwear and Denizen businesses and the Dockers business, which is now classified as a discontinued operation.
Net income tallied $135 million, or 34 cents a share, up from losses of $10.6 million, or 3 cents a year earlier. Adjusted earnings per share were 38 cents — 10 cents ahead of the 28 cents analysts had penciled in, according to Yahoo Finance.
Levi’s ended the quarter with $574 million in cash and total liquidity of $1.4 billion.
Harmit Singh, chief financial and growth officer, called that “a very good spot” to be in.
The company is holding Dockers for sale and was said to be in exclusive talks with brand management firm Marquee Brands. But sources said that period of exclusivity expired just as the market hit its tariff crisis, making it difficult to value the brand in the current environment.
“It’s a competitive process,” Singh said of the Dockers sale. “There are a couple of prospective buyers. We are in the middle of the sale process and it is confidential right now.”
He said the company was confident that a deal would close “sometime in 2025.”
If the uncertainty in the market has complicated the Dockers sale, Gass said Levi’s mission was still clear despite a volatile world.
“There is uncertainty at times like these,” the CEO said. “Levi’s is the type of brand that people will go to. They are going to go to brands that they trust, and we stand for the things that are really important in uncertain times, which is quality, value, taking care of our consumer. We’re going to continue to focus on great execution and operate against our playbook. That playbook is working.”
