The trend of Western wear has been gaining significant attention recently, with consumers opting for full denim looks from head to toe. This resurgence in popularity has been attributed to cultural influences such as Beyoncé’s “Cowboy Carter” album and Louis Vuitton’s fashion line. Levi Strauss, a 171-year-old clothing maker, has been capitalizing on this trend, with sales of denim skirts, jumpsuits, dresses, and shirts all experiencing significant increases.
Levi Strauss CEO Michelle Gass has been vocal about the company’s new focus on dressing customers in denim from head to toe. The company is aiming to take advantage of the growing demand for Western wear by expanding its offerings beyond its traditional denim jeans. Despite the success of this strategy in increasing sales of denim skirts and dresses, Levi Strauss experienced a significant drop in its stock price following its latest earnings report.
While Levi Strauss posted strong earnings per share for the quarter, its revenue fell slightly short of analysts’ expectations. The company attributed the sales miss to unfavorable foreign exchange rates and weakness in its Dockers brand. This performance led to a steep decline in Levi Strauss’s stock price, despite the overall positive sentiment around the resurgence of Western wear. Analysts have expressed concerns about the company’s wholesale business performance and the potential struggles in European sales in the second half of the year.
Analysts have mixed views on Levi Strauss’s performance, with some expressing disappointment in the company’s second-quarter results. Wells Fargo analyst Ike Boruchow highlighted that Levi’s missed expectations, leading to a significant drop in its stock price. Citigroup analyst Paul Lejuez, on the other hand, highlighted several tailwinds driving optimism for the stock, including new styles and fits as well as the influence of Beyoncé on the brand.
The Western wear boom has presented both opportunities and challenges for Levi Strauss. While the company has seen success in expanding its denim offerings beyond traditional jeans, it has also faced criticism for failing to meet analysts’ revenue expectations. Moving forward, Levi Strauss will need to address concerns about its wholesale business and international sales performance to maintain investor confidence. As the popularity of Western wear continues to grow, Levi Strauss must capitalize on this trend while addressing the challenges that come with it.