Levi Strauss & Co. reported stronger-than-expected first-quarter earnings on Thursday, with direct-to-consumer (DTC) sales accounting for more than half of total revenue for the first time in company history. The apparel maker posted revenue of $1.58 billion, beating analyst estimates of $1.52 billion, while adjusted earnings per share of $0.42 surpassed the projected $0.38.
The company attributed its performance to robust demand in North America and Europe, where DTC sales—including e-commerce and company-owned stores—grew 18% year-over-year. Analysts note this marks a strategic shift for the 171-year-old denim manufacturer, which has traditionally relied on wholesale partnerships.
‘This quarter demonstrates the success of our multi-year pivot toward controlling our brand narrative through owned channels,’ a company spokesperson told analysts during the earnings call. The guidance raise of 3-5% for full-year revenue growth notably excludes potential impacts from the Trump administration’s proposed 15% tariff on apparel imports.
Market observers suggest Levi’s digital transformation—including its 2024 acquisition of virtual fitting room startup TrueFit—has positioned it well against fast-fashion competitors. However, some caution that tariff implementation could erase $80-100 million from annual profits if enacted.
Looking ahead, investors will watch how Levi’s balances its premium DTC margins against wholesale volume in emerging markets. The company plans to open 40 new stores in Asia this year while testing AI-driven inventory systems to reduce overstock.