Levi’s (LEVI) , famous for its denim apparel and having sold clothes since 1853, saw increased consumer momentum during the 2024 holiday season.
Levi’s fourth-quarter earnings report for 2024 revealed that its net revenues in the Americas increased by 12% year-over-year during the quarter as it faced higher full-price sales and more traffic in U.S. stores.
Levi's also said it became the No. 1 women's denim brand in the U.S., and its campaign with Grammy-winning artist Beyoncé has driven demand across its business.
Related: Lululemon CEO sounds alarm on unexpected customer behavior
Despite ending 2024 on a strong note, Levi’s CEO Michelle Gass warned during an earnings call in January that the company’s sales face major threats.
“We are pleased with our Q4 results and the momentum into Q1 '25,” said Gass. “However, we recognize there continues to be a lot of uncertainty related to the macro environment, potential tariffs, changes in the tax code as well as worsening foreign exchange. While we have a number of initiatives that we believe will help us to drive organic sales and earnings in the next few years, the best approach for us is to plan prudently.”
Levi's CEO flags a major problem
During a Shoptalk event on March 26, Gass acknowledged that consumers are increasingly tightening their spending, according to a recent report from Retail Dive.
“Are the consumers going to be more choiceful? Yes, but I think in times like this, where there’s more pressure and more uncertainty, consumers also go to brands that they trust and that they love, and we’re definitely one of those,” said Gass.
She also said that in order to win back frugal customers, the company has to provide them with more “newness.”
“It’s up to us,” said Gass. “If the wallet’s tighter, then we have to work harder. We have to work harder in driving brand relevance. We’ve got to make sure that every single time they’re coming into one of our stores, it’s a phenomenal experience. And we’ve got to keep innovating and bringing them newness and things that they can’t resist buying. That’s our job.”
Gass also emphasized that Levi’s products have “an approachable price point.”
“There are jeans that cost a lot more; there are jeans that cost less,” said Gass. “But it is an approachable price point to start.”
Levi's has another looming threat on its hands
Many consumers across the country have been restricting their spending amid inflation and higher living costs, especially after President Donald Trump enforced 20% tariffs on all goods imported from China and 25% tariffs on all goods imported from Mexico and Canada on March 4.