Levi Strauss balances global demand and strategy shifts in a mixed consumer market

Levi Strauss reported a steady fourth-quarter performance as it navigated uneven consumer demand across regions while adjusting its product mix and sales strategy to counter higher trade costs and a cautious retail environment.

The denim maker posted quarterly net revenue of $1.77 billion, up 1% from a year earlier and ahead of market expectations, as per a report by Reuters. Adjusted earnings of 41 cents per share also exceeded forecasts, reflecting stronger full-price selling and cost discipline during the holiday period.

Performance varied by geography. In the United States, revenue declined as inflation and broader economic uncertainty continued to weigh on discretionary spending, particularly among low- and middle-income consumers. By contrast, Europe delivered solid growth, while Asia also posted modest gains, highlighting a more balanced demand picture outside the US market.

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Against this backdrop, Levi leaned more heavily on its direct-to-consumer channels, which grew 8% during the quarter. The company narrowed its holiday assortment to its most popular styles, particularly those resonating with Gen Z and younger millennial shoppers, helping support full-price sales and reduce reliance on promotions.

The retailer also took steps to manage the impact of US tariffs on apparel imports, securing inventory earlier in the season, negotiating with suppliers, and implementing selective price increases across key markets. Levi expects tariffs to weigh modestly on margins over the full year but aims to offset the impact through a combination of pricing, efficiency gains, and sourcing adjustments.

As part of its longer-term repositioning, Levi has exited lower-margin businesses in North America and expanded its premium offerings, including the Blue Tab line, as it targets higher-income consumers and seeks to improve brand mix.

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Looking ahead, Levi offered a cautious outlook, reflecting continued pressure in the US consumer market and higher tax costs, even as it benefits from a more diversified geographic footprint and a growing direct sales base.