Levi’s store located at Vineland Premium Outlets in Orlando, Florida.
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In the lyrics of her latest album, beyonce sings “Denim, denim, denim, denim.”
Levi Strauss Shoppers are taking this advice to heart. Levi Strauss executives were ecstatic.
The iconic 171-year-old clothing maker said Wednesday that Western wear is booming as consumers opt for head-to-tail denim. As the style gains cultural traction, its popularity is filtering into niche denim areas like jeans, shirts, skirts and dresses that aren’t part of Levi’s well-known blue jean offerings.
“Western clothing has grown in popularity to the point where it has The highest level in history.
The Western renaissance movement has been gaining traction over the past few months, with fashion shoppers looking for pieces like jeans, boots and cowboy hats. Earlier this year, Beyoncé’s hit song “Levii’s Jeans” featured a reference to the Levi’s jeans brand.
In addition to Beyoncé’s chart-topping “Cowboy Carter” album, the growing popularity of the Western style has also Louis Vuitton earlier this year and Taylor’s ongoing Eras tour.
Gass took over as CEO of Levi Strauss earlier this year after serving as Kohl’stouted the fact that denim was taking hold in the popular imagination, as Western clothing became more widely popular throughout the culture.
More specific data shared on the company’s earnings call Wednesday showed how Levi Strauss is capitalizing on demand for denim beyond its popular “501” jeans. Sales of denim skirts, jumpsuits and dresses have at least doubled in the latest quarter, Gass said. She said sales of Western-style shirts have also grown significantly, especially women’s shirts.
The 55-year-old CEO said Levi’s new strategy, which seeks to dress customers in head-to-toe denim, is a success.
“Yes, our new focus is to continue to have denim, but denim from head to toe,” Gass told CNBC’s “Mad Money” late Wednesday night. She said, while pointing to the company’s denim skirts and jumpsuits. The skirt category hasn’t historically been big, but now “they’re exploding.”
Denim trend sets high bar for Wall Street
what can be confirmed is, A well-documented denim craze alone won’t necessarily impress Wall Street. Shares of Levi Strauss fell more than 15% on Thursday on the latest data, marking its second-worst day since going public in early 2019.
Despite the boom in denim, Levi Strauss’ fiscal second-quarter revenue of $1.44 billion was slightly below the $1.45 billion consensus forecast by analysts polled by LSEG. The company’s finance chief told CNBC that the poor sales results were due to unfavorable currency rates and weakness in the Dockers brand.
On the other hand, Levi Strauss’ earnings per share excluding items were 16 cents, higher than analysts’ average estimate of 11 cents.
Shares have risen in the year to Wednesday amid a resurgence in cotton fabrics and Western-style clothing. Following Thursday’s decline, the stock is still up more than 18% this year. For comparison, share Cantur brandThe parent company of denim brands Wrangler and Lee has gained 5% so far this year.
Levi Strauss, year to date
Wells Fargo analyst Ike Boruchow said Levi’s second-quarter release was “simply not good enough” for “one of the most crowded bulls in the market today.” In other words, the company failed to meet generally accepted high standards, he said.
Meanwhile, Citigroup analyst Paul Lejuez said Levi’s performed well in the latest quarter, but pointed out that wholesale business performance and European sales in the second half of the year may continue to struggle, which is worrying.
Lejuez pointed to a number of tailwinds as reasons to be optimistic about the stock. His two reasons for excitement – new styles and fit – are common to clothing manufacturers.
The last one in Lejuez is even more unique: Beyoncé.
—CNBC’s Gabrielle Fonrouge and Julie Coleman contributed to this report
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