Levi Strauss & Co. is having a second. Denim gross sales are surging as vogue developments shift again to iconic appears to be like, together with white shirts and denims. The pattern shift is driving denim gross sales, elevating Levi’s gross sales and revenue.
Kylie Jenner helped rekindle broad curiosity in denims and white shirts this summer time after she was usually seen carrying a easy white tank high and denims. Jenner even wore mid-rise denims to rejoice the launch of Kylie Cosmetics at Ulta.
Levi’s at a look:
- Annual income in 2026 (est): $6.55 billion, up from $6.23 billion (est) in 2025.
- International attain: 50,000 areas in 120 nations worldwide.
- Variety of staff: 18,700.
Supply: Levi Strauss & Co.
It is actually not the primary time Levi’s has loved such a second. Denims have been standard for many years, impressed by greats stretching again to James Dean’s iconic denims and white t-shirt look within the Nineteen Fifties. Look within the closets of practically each American, together with me, and also you’re certain to seek out a minimum of one pair of Levi’s, or a pair from rivals like True Faith or Wrangler.
“The denim category is accelerating both here in the U.S. and globally. And as the definitive market leader, we are very well positioned to take advantage of that,” acknowledged Levi’s President Michelle Gass on Levi’s earnings name on Oct. 9.
The corporate’s success apart, one other regarding buyer pattern has emerged, and it is extra widespread than Levi’s. Throughout a current convention name with buyers, Levi’s joined different attire firms, together with Nike, to say clients pays extra for his or her merchandise within the months forward.
Buyers are embracing Levi’s as the recognition of denims has elevated in 2025.
Scott Olson/Getty Pictures
Denim clients have selections
Attire, like denims, is a discretionary buy. When budgets are tight, consumers need not purchase extra clothes or purchase new. As a substitute, they will go to thrift retailers or lengthen the lifetime of current garments of their wardrobes.
There are additionally many choices at various value factors. Buyers can purchase denim on-line at Amazon from many producers or go to Walmart or Goal to purchase clothes at various costs.
For instance, Walmart presents denims beneath its non-public label manufacturers, together with No Boundaries and Free Meeting, usually at a lot decrease costs than brand-name makers, together with Levi’s.
Extra retail:
- Main workplace provide retailer offered after it closed 1,000 shops
- AutoZone makes harsh choice clients will not like
- Iconic retail chain closed 80% of its shops
Nonetheless, many proceed to purchase Levi’s regardless of different selections due to their high quality and a protracted historical past that is made it one of many world’s most acknowledged manufacturers.
Its loyal fan base is well-deserved. Levi’s invented blue denims in 1873 at its San Francisco, California, headquarters, and its Levi’s 501 Authentic Match Denims are probably the most standard items of clothes ever offered, hauling in about $800 million yearly.
Levi’s recognition provides it extra value flexibility than rivals, however that does not essentially imply consumers are utterly oblivious to costs.
Tariffs hit attire firms onerous
Like most attire firms, Levi’s has confronted elevated stress this 12 months due to President Donald Trump’s choice to ramp up tariffs on imports.
In keeping with the American Attire & Footwear Affiliation, about 97% of U.S. attire is manufactured abroad, which means tariffs apply to nearly all the pieces we put on.
Associated: Iconic mall retailer has comeback after closing 100s of shops
Tariffs’ chunk varies relying on the place the clothes are made, however the taxes are stiff regardless.
For instance, Vietnam, Cambodia, Bangladesh, and Indonesia, main attire manufacturing nations, face import taxes of about 20%.
China attire tariffs can exceed 50% when contemplating all the varied tariffs stacked upon one another, and people might rise rather more, given President Trump simply threatened a further 100% tariff on the nation starting Nov. 1.
Which means the associated fee to huge attire firms, together with Levi’s, totals billions of {dollars}, and bringing that manufacturing again into America is not possible, since most of our mills have lengthy since shuttered, and employees have moved on to different industries.
Whereas Levi’s made most of its denims within the U.S. within the Nineteen Fifties, primarily at crops in California, it started shifting manufacturing to China and Mexico within the Eighties to reap the benefits of decrease manufacturing prices.
It closed its final manufacturing services in Jan. 2024, ending the manufacturing of its Levi’s denims in America. These days, its clothes is made by contract producers in 25 nations, together with China, Bangladesh, Vietnam, India, and Mexico.
Industrywide, U.S. textile and attire firms employed an estimated 2.5 million individuals within the Nineteen Fifties, and at their peak, main firms like Levi’s operated dozens of factories throughout the nation.
Nevertheless, based on the Bureau of Labor Statistics, simply 266,000 employees have been employed within the business as of August. Meaning the business has misplaced about 90% of its employees.
Levi’s shifts to full-price mannequin, boosts costs
Its reliance on imports means Levi’s faces a a lot greater tax invoice this 12 months than final. In keeping with the Yale Finances Lab, the efficient tariff fee within the U.S. stands at 17.4%, the very best since 1935, and up from 2.4% in January, earlier than new tariffs have been enacted.
Levi Strauss & Co. income by fiscal 12 months:
- 2025: $6.2 billion (est.)
- 2024: $6.4 billion
- 2023: $6.2 billion
- 2022: $6.2 billion
- 2021: $5.8 billion
Supply: Levi Strauss & Co. 10-Okay filings with the SEC
“Our updated guidance reflects the latest tariff rates, which include 30% for China and an increase to approximately 20% for the rest of the world. This is higher than our last assumption. And as a result, we estimate the full year gross impact of tariffs before mitigation to be approximately a 70 basis point headwind to gross margin compared to 50 basis points previously,” mentioned CFO Harmit Singh on Levi’s earnings name.
The corporate is negotiating with suppliers and slicing prices elsewhere, however it will not take in the brand new tariff hit solely.
Consequently, it is embracing a shift to a full-price mannequin, resisting reductions, and selectively growing costs the place it could possibly.
We now have taken reasonable pricing, and we’re driving increased full-price gross sales, mentioned Singh.
Regardless of shrinking the variety of merchandise it produces and promoting extra throughout nations to extend scale and scale back prices, the corporate’s push towards full-price gross sales and better costs will proceed into 2026.
“We probably see tariff impact in the second half of this year, next year in the first half,” mentioned Singh. “We’re looking at pricing opportunities, again, targeted not only in the U.S. but globally… We continue to focus on full price selling, and it’s not anywhere close to 100%.”
Because of efforts to offset the hit to its backside line brought on by tariffs, together with value adjustments, Levi’s expects solely a 0.20% drag on its gross margin, or about two to 3 cents of successful to its earnings per share.
“Looking to 2026, we are continuing to take actions to offset the impact of tariffs. As a reminder, these mitigation initiatives include promotion optimization, targeted pricing actions, vendor negotiation, and further supply chain diversification,” mentioned Singh.
Wall Road weighs in on Levi’s
Whereas tariffs drag on outcomes, demand energy and efforts, together with its pricing selections, are fueling increased income than final 12 months.
Gross sales in its fiscal third quarter, ending August 31, grew 7% 12 months over 12 months to $1.54 billion, whereas EPS elevated 3% to 34 cents per share. Levi’s inventory value is up 22.5% 12 months to this point, outpacing the S&P 500’s 13% acquire.
Wall Road estimates that Levi’s earnings per share will climb from $1.33 in 2025 to $1.46 in 2026.
After the corporate’s quarterly replace, Financial institution of America analysts wrote:
“Guidance likely to prove conservative; beat and raise story continues… Continued global share gains and a strong denim category should drive consistent MSD sales growth and margin expansion.”
The analysts additionally pointed to the robust demand developments remaining regardless of increased costs.
“We think upside potential to this guidance could come from a combination of lower promotions (assuming consumer demand remains strong) and FX (if rates hold). LEVI has selectively increased pricing globally and has not seen any negative impact.”
Financial institution of America charges Levi’s a “buy,” with a inventory value goal of $27, up 27% from its value eventually examine.
The resilient demand up to now is unlikely to alter Levi’s strategy to pricing, particularly given Wall Road’s assist.
Associated: Nike sends hard-nosed message on costs
