In a lyric on her newest album, Beyoncé sings “denim on denim, on denim, on denim.”
Levi Strauss customers are taking that recommendation to center. Levi Strauss executives are ecstatic.
Western put on is booming as shoppers go for top-to-bottom denim appears, the long-lasting, 171-year-old clothes maker stated on Wednesday. As the manner wins cultural want, its reputation is juicing denim niches — like shirts, skirts and dresses — that fall out of doors Levi’s widely-known blue jean choices.
“The growing popularity of Western wear is at an all-time high,” CEO Michelle Gass instructed analysts Wednesday night time after the California-based store’s newest profits file for the quarter led to May.
A Western renaissance has been gaining traction during the last a number of months, sending fashionable customers in search of items like denims, boots and cowboy hats. Levi’s scored an enormous hit when its jean logo was once referenced in Beyoncé’s tune “Levii’s Jeans,” launched previous this yr.
Beyond Beyoncé’s chart-topping “Cowboy Carter” album, the greater ubiquity of Western taste has additionally been tied to a manner line unveiled by way of Louis Vuitton previous this yr and Taylor Swift’s ongoing Eras Tour.
Gass, who took over as Levi Strauss CEO previous this yr after up to now serving because the CEO at Kohl’s, has touted that denim is having a second in the preferred creativeness, with Western put on trending extra extensively right through the tradition.
More particular information shared at the corporate’s profits name Wednesday confirmed how Levi Strauss is taking merit of call for for denim past its well-liked “501” denims. Sales of denim skirts, jumpsuits and dresses all no less than doubled in the most recent quarter, Gass stated. Western shirts sales also are up considerably, she stated, particularly at the ladies’s facet.
Levi is discovering luck in what the 55-year-old leader govt described as a brand new technique of seeking to get dressed consumers denim — from head-to-toe.
“Our new focus is, yes, continuing to own jeans, but taking that denim top to bottom,” Gass stated on CNBC’s “Mad Money” past due Wednesday. While noting that the denim skirt and get dressed classes haven’t been traditionally massive for the corporate, now “they’re exploding,” she stated.
To ensure, the well-documented denim craze by myself isn’t essentially impressing Wall Street. Levi Strauss tumbled greater than 15% on Thursday in accordance with its newest numbers, its moment worst day since going public in early 2019.
Levi Strauss posted $1.44 billion in income within the fiscal moment quarter, slightly missing the $1.45 billion consensus forecast of analysts polled by way of LSEG regardless of the denim growth. The corporate’s finance leader instructed CNBC that the sales pass over was once pushed by way of destructive foreign currencies charges and weak point within the Dockers logo.
On the opposite hand, Levi Strauss earned 16 cents in keeping with percentage, apart from pieces, forward of the 11-cent reasonable estimate by way of analysts.
In the yr thru Wednesday, stocks had run up amid the thrill across the cotton-based material and the resurgence of Western clothes. Following Thursday’s drop, the inventory continues to be up greater than 18% at the yr. For comparability, stocks of Kontoor Brands, the mum or dad of denim manufacturers Wrangler and Lee, have risen 5% yr so far.
Wells Fargo analyst Ike Boruchow stated that for “one of the most crowded longs in the space today,” Levi’s second-quarter unlock “was simply not good enough.” In different phrases, the corporate overlooked what was once an admittedly top bar, he stated.
Citigroup analyst Paul Lejuez, in the meantime, concept Levi’s most up-to-date quarter was once excellent, however cited the wholesale industry’s efficiency and the potential of European sales to proceed suffering in the second one part of the yr as grounds for worry.
Lejuez pointed to a number of tailwinds as grounds for optimism at the inventory. Two of his causes using pleasure — new kinds and suits — are not unusual for a clothes maker.
Lejuez’s ultimate one was once extra distinctive: Beyoncé.
— CNBC’s Gabrielle Fonrouge and Julie Coleman contributed to this file.