With Layoffs And A New CEO, Levi's Turns The Page

There are lots of moving pieces at Levi Strauss & Co., including news about promising lightweight and non-denim pants. But while the company’s fourth-quarter financial results, the first released under new president and incoming CEO Michelle Gass, beat expectations, they also included a forecast for the months ahead that is softer than observers anticipated, along with widespread layoffs in its corporate division. And while the company’s D2C efforts continue to flourish, struggles with wholesale partners continue.

The company also extended its partnership with the San Francisco 49ers and the Santa Clara Stadium Authority, locking in the naming rights for Levi’s Stadium in a $170 million deal that adds another ten years.

Net revenues rose 3% to $1.64 billion, up from $1.59 billion in the year-ago period. Global direct-to-consumer revenues climbed 11% to $2.6 billion, with ecommerce sales up 19%. The company says D2C transactions now account for 42% of total revenues, up from 39% in the fourth quarter of 2022. Sales of women’s clothing also shone, up 8% for the quarter, driven by loose and baggy styles.



Wholesale sales dropped 2%, with European declines offsetting U.S. and Asian increases.

In America, overall sales gained 6%, buoyed by products aimed at higher-income shoppers.

Net income dropped 16% to $127 million, compared to $151 million in 2022.

The earnings call marked the handoff between outgoing CEO Chip Bergh, who led the company for 12 years, and Gass, who joined last year as his designated successor.

Gass, no stranger to tough calls while leading Kohl’s, announced a new productivity initiative, Project FUEL, eliminating 10% to 15% of the global corporate workforce.

“We have a strong pipeline of newness and innovation launching this year to fuel consumer demand,” Gass said in the announcement. “I am confident in the significant growth opportunities ahead for this company -- including accelerating international growth, becoming a denim apparel lifestyle business, and leading with D2C. The success of these strategic initiatives drove our growth in the fourth quarter.”

For fiscal 2024, however, the company forecast net revenue growth of 1% and 3%, lower than observers expected.

Gass has big shoes to fill. Under Bergh’s leadership, Levi’s flourished as the world’s leading denim brand, larger than the next three competitors combined. It also built cultural connections, working with music and fashion influencers on issues ranging from voting, LGBTQIA+ equality, immigration and reproductive rights, winning attention for anti-gun violence and sustainability efforts.

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