Levi Strauss & Co. reported increases in both overall net revenue and net revenue from ecommerce in its fiscal Q1 ended March 1.
Net revenue increased 14% year over year to $1.74 billion in the quarter, while net revenue from ecommerce grew 21% over the same period.
Executives at the denim retailer discussed success in its direct-to-consumer (DTC) business and gave updates on artificial intelligence (AI) initiatives as reasons supporting growth.
Levi Strauss ranks No. 155 in the Top 2000. The database ranks North America’s largest online retailers by their annual ecommerce sales and more.
Levi Strauss DTC and overall revenue results in Q1
Levi Strauss DTC revenue grew 16% in Q1 — slightly outpacing the 14% growth of net revenue — comprising just over half of total revenue at 52%.
DTC becoming a larger part of the business is an intentional move, according to Michelle Gass, president and CEO.
“We are becoming a more DTC-first denim lifestyle company, and it is leading to more consistent and faster growth, a much larger addressable market and higher profitability,” she told investors in an earnings call.
Levi’s ecommerce sales by year
Ecommerce, which grew 21% on a reported basis and 17% on an organic basis, makes up part of the DTC category. New consumers are primarily discovering Levi Strauss through digital channels and tend to skew younger than other customers, Gass said. 70% of new U.S. ecommerce orders in Q1 came from members of the Millennial and Gen Z age cohorts, she added.
“This reflects our ability to connect with younger consumers as they enter the category, driven by product newness, lifestyle-led storytelling and a more dynamic digital experience,” Gass said.
Levi Strauss executives give updates on AI
Levi Strauss also provided updates on both internal and customer-facing AI uses.
In January, Levi Strauss shared plans to develop an internal AI platform to improve efficiency in partnership with Microsoft and Google Cloud.
The platform is now in use inside the company.
“Across the organization, we are leveraging our global talent hubs and accelerating productivity through expanded AI initiatives, allowing us to support our growing business while keeping overall head count flat year over year,” chief financial and growth officer Harmit Singh said.
Levi Strauss is also employing AI to facilitate consumer engagement and loyalty online, Gass said without sharing specifics. Gass previously described an AI stylist chatbot and an AI-powered tool called Outfitting to make personalized recommendations.
Levi’s finance officer Harmit Singh to exit
Along with financial results, Levi Strauss announced that Harmit Singh will leave his role as chief financial and growth officer after a successor is appointed following an ongoing search process. Singh will then serve as a special advisor to facilitate the transition.
“He played an important role in taking the company public, supporting the company’s transformation into a DTC-first retailer, and strengthening our financial foundation and operating rigor, positioning us for long-term profitable growth,” Gass said of Singh.
Prior to his 13 years at Levi Strauss, Singh spent 14 years at YUM! Brands as senior vice president and chief financial officer of Yum Restaurants International, and several years as chief financial officer of Hyatt Hotels.
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