• by Sarah Mahoney , 11 hours ago

Levi’s back-to-school campaign bet big on loose-fitting denim. But as the season progressed, consumers yawned. They wanted low-rise jeans, in every variety. And while Levi’s had plenty of them, “it just wasn’t our leading message,” said CEO Michelle Gass on the company’s earnings call. “When the team understood that, they quickly pivoted.”

It’s rare for a category-leading brand to admit such a misstep, and even rarer to publicly explain how it fixed it. But Gass gave the marketing world a closer look at what went wrong.

“In the U.S., while our marketing continued to generate strong consumer engagement and reinforce brand heat, we had fewer major brand-building moments than a year ago,” she said. “In addition, our back-to-school campaign did not drive the traffic and demand we anticipated. Importantly, we moved quickly to address these U.S. traffic challenges.”

That included a speedy switch, a rare move for a company this large: Gass explained that the company reshot the campaign, remerchandised stores, and encouraged its army of content creators to shift the social media strategy to focus on low-rise styles rather than loose fits.

The company received $80 million in tariff refunds, which helped increase ad budgets.

“We are redeploying a substantial majority of the tariff refunds we recorded in the third quarter back into the business across both the third and fourth quarter,” she said. “In addition to increased marketing investments, we are putting those funds to work behind sharper value for consumers during key holiday promotional moments.”

Those include what she called “breakthrough brand moments,” experiential pop-ups, personalized styling and gifting assortments. “We are creating new ways for consumers to engage with Levi's throughout the holiday season,” she said.

Levi’s is teaming up with Macy’s for the retailer’s 100^th Thanksgiving Day Parade to celebrate with a limited-edition clothing launch and its own balloonicle, a balloon-and-vehicle combination. “An iconic event deserves an iconic partnership,” Macy’s said in the announcement. The collection includes parade-inspired motifs, such as patches, bandanas, musical references and of course, plenty of stars from the Macy’s logo.

For the third quarter, the San Francisco-based company said revenues rose 4% to $1.61 billion, while U.S. sales declined 1%. Net income rose 39% to $169 million. Direct-to-consumer sales rose 2%, less than it had expected. Sales at Beyond Yoga rose 9%.