Levi's CEO Michelle Gass Talks Direct-to-Consumer Strategy

Summary

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Bloomberg Talks: Levi's CEO Michelle Gass Talks Direct-to-Consumer Strategy

Date: April 8, 2026
Host: Bloomberg
Guest: Michelle Gass, President & CEO of Levi Strauss & Co.

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Episode Overview

This episode features an in-depth conversation with Michelle Gass, the President and CEO of Levi Strauss & Co., touching on the company’s strong recent performance, direct-to-consumer (DTC) growth, brand evolution, supply chain strategies, and future opportunities. Gass discusses how Levi’s is navigating the crowded denim market, leveraging high-impact cultural collaborations, diversifying products, and adapting to a challenging macroeconomic environment.

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Key Discussion Points & Insights

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1. Levi’s Recent Performance & Momentum

• Strong Growth: Levi Strauss & Co. reported robust quarterly results, with revenue of $1.7 billion, a 9% organic growth rate, and 14% growth on a reported basis. ("We delivered 9% organic growth, 14% on a reported basis." – Michelle Gass, [01:24])
• Investors’ Response: The stock is up more than 11% in a single session and nearly 80% over 12 months.
• Broad Momentum: Growth is observed across geographies, gender, and product categories.
• Quote:

  “We are seeing momentum across the board, which is around our strategies really picking up and accelerating.” – Michelle Gass ([01:24])

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2. Brand Strength and Cultural Relevance

• Cultural Centerpiece: Levi’s positions itself “at the center of culture,” which underpins its multi-generational appeal.
• Celebrity Collaborations: Partnerships with major artists like Beyoncé, Shaboozey, and K-pop star Rosé (of BLACKPINK) amplify their reach.
• Super Bowl Campaign: The “Behind Every Original” global brand campaign launched during the Super Bowl for maximum impact.
• Cross-sector Appeal: The campaign bridges sports, fashion, music, and popular figures, appealing to a diverse audience.
• Quote:

  “This is about launching, like I said, a campaign for the year... and leans into what Levi does best, across sports, across fashion and music.” – Michelle Gass ([02:26])

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3. Organic & Authentic Collaborations

• How Collabs Happen: Some partners approach Levi’s, others are sought out, and many partnerships emerge organically through trends or mutual interest. ("It's, it's, it's all of the above. It happens organically." – Michelle Gass, [04:05])
• Cultural Ripples: Moments like Harry Styles’ dancers wearing 501s at the BRITs reinforce Levi’s central position in pop culture.

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4. Expanding Beyond Denim: DTC & Lifestyle Strategy

• DTC Focus: Evolving from wholesale to DTC is central to Levi’s growth, both online and through branded stores.
• From Jeans to Wardrobe: Levi’s aims to be “head to toe,” offering not just jeans, but tops, jackets, dresses, and more.
• Denim Lifestyle: Effort to increase tops penetration—“playing in the total apparel space”—supports this vision.
• Quote:

  “We want to give you the whole wardrobe. It starts with the jeans, but tops, button downs, jackets, outerwear, dresses, all through the lens of Levi's." – Michelle Gass ([04:42])

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5. Navigating a Challenging Macroeconomic Environment

• Resilience: During volatility, Levi’s benefits from being a trusted, durable brand with broad product offerings at multiple price points.
• Value Proposition: Levi’s serves every segment, from value tiers (“Signature by Levi Strauss,” $20–25, sales up 16%) to premium ($200 Japanese denim).
• Quote:

  “During times like this, people...really do go to brands that they trust, that they love. We offer quality, we offer great value, we offer durability.” – Michelle Gass ([05:43])

• Innovation & Execution: The company stays nimble and seeks to address consumer needs “in the moment.”

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6. Supply Chain Diversification

• Global Network: Levi’s maintains a diversified supply chain across multiple countries, which has proved valuable amid tariffs and post-pandemic disruptions.
• Supplier Relationships: Enduring, decades-long partnerships help Levi’s adapt quickly.
• Tariff Management: Current financial guidance bakes in higher tariffs; recent potential reductions are not yet factored—a possible upside of up to $35 million in EBIT.
• Production Philosophy: Despite global tensions, manufacturing will remain overseas due to industry shifts.
• Quote:

  “We have a robust, very diversified supply chain across many, many countries. We have a really strong team that is agile and responsive...” – Michelle Gass ([07:14])

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7. Growth Targets and Strategic Focus

• Revenue Ambition: While not publicly committing to a specific $10 billion timeline, Gass describes an ambition for bold goals and continued consistent growth.
• Profit Progression: EBIT margin steadily increasing—from 9–10% a few years ago, to 11.5% last year, now guiding to 12%.
• Brand Focus: Recent sheds (e.g., selling Dockers) allow Levi’s to focus on core strengths and global expansion.
• Quote:

  “We are confident...The exciting thing, you have visibility, the strategies are working.” – Michelle Gass ([08:50])

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8. Fashion’s Fickleness & Building for the Future

• Setting Trends: Levi’s sees itself not just following but fueling denim and apparel trends.
• Expanding Styles: Shift from just denim to lifestyle apparel diversifies risk and broadens addressable market by 15x.
• Non-Denim Growth: Already, 40% of Levi’s business is non-denim; tops business up 13% in last quarter.
• Quote:

  “This evolution to denim lifestyle...basically increases our addressable market by 15x; we're playing in that $1 trillion market in apparel.” – Michelle Gass ([10:17])

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9. White Space & Global Opportunities

• Women’s Potential: Women’s is under 40% of revenue but could be at least 50% in an optimal scenario.
• Apparel Mix: Striving for a 1:1 top-to-bottom ratio (currently 2:1, previously 5:1), indicating runway for tops.
• International Expansion: US remains important, but much growth will come from global markets where Levi’s is just starting out.
• Quote:

  “Women's has a big play in the apparel market...That should be at least half our business. So we're expecting tremendous growth there.” – Michelle Gass ([11:11])

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Memorable Quotes & Moments

• On Brand Authenticity:

  “Levi's operates at the center of culture and we're hitting a new stride with the brand.” – Michelle Gass ([02:26])

• On Global Appeal:

  “We had people lining out the doors to get the special collab [with Nike and Jordan].” – Michelle Gass ([03:23])

• On Growth Mindset:

  “I think it's important to have bold goals.” – Michelle Gass ([08:50])

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Notable Timestamps

• [01:24] – Gass details the sources of Levi’s strong momentum and multi-dimensional growth.
• [02:26] – Discusses Super Bowl campaign, celebrity collaborations, and brand crossovers.
• [04:05] – On how cultural partnerships happen and support organic brand growth.
• [04:42] – The pivot from denim to full lifestyle apparel.
• [05:43] – Navigating macroeconomic uncertainties with brand trust and value offerings.
• [07:14] – Supply chain diversification and handling tariffs.
• [08:50] – Levi’s growth and profit goals, and executing the transformation strategy.
• [10:17] – Adapting to fast-changing fashion, building the “denim lifestyle.”
• [11:11] – The future growth potential in women’s business and international markets.

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Final Takeaway

Michelle Gass positions Levi’s as a dynamic, resilient global player at the crossroads of fashion, culture, and direct consumer engagement. By doubling down on brand authenticity, pushing into lifestyle apparel, navigating global uncertainties, and targeting untapped opportunities—especially in women’s and international markets—Levi’s charts a confident path for sustained, broad-based growth.

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Transcript

[Michelle Gass]

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[Bloomberg Host]

Thank you Harry. Thank you, Hulu. Thank you fx. Thank you, Love story and more. We want to talk about Levi Strauss and Govey Company's latest results. Really knocking the socks off. The stock is up the most in one year as the company raised its projections for the year after reporting better than expected quarterly results. They cited strong demand in all regions as the denim brand steers shoppers to its own stores and website. We're going to talk about that a lot. Company reporting revenues of 1.7 billion in the fiscal quarter that exceeded the average of analyst estimates earnings per share. Also excluding some items surpassing expectations. The stock now up about 7% year to date and has gained nearly 80% in the past 12 months.

[Michelle Gass]

Yep.

[Bloomberg Host]

For those watching right now, it is up more than 11%. Tim, in today's session with us is

[Bloomberg Interviewer]

the President, CEO of Levi Strauss and Co. She's also a member of the company's board. She's former CEO of Kohl's. She spent close to 17 years too, at Starbucks. We got Michelle Goss here in the studio. Welcome. It's good, it's good to see you. The stock soaring. Investors are liking what they see. Where did the momentum come from and what's really working right now?

[Michelle Gass]

Yeah, well, first, thanks for, thanks for having me. And I'm really excited to talk about how we started the year. You know, we are seeing momentum across the board which, which is around our strategies really picking up and accelerating. So we delivered 9% organic growth, 14% on a reported basis. We are seeing this across geographies. We're seeing this across categories, we're seeing it across genders. Why across channels?

[Bloomberg Host]

Why is this happening?

[Michelle Gass]

Well, you know, it's the brand, it's the product and it's the execution and all of those things are working. And I got to tell you, the team is doing a phenomenal job. We're coming off of a solid year last year and it's accelerating right into 2020.

[Bloomberg Host]

Still. Denim, though, is such a crowded category. Like I won't go to certain department stores because it's just too much for me. But I do go to Levi's and

[Michelle Gass]

I thank you for that. You're welcome.

[Bloomberg Host]

You're welcome. And I said to you coming in? My 23 year old. She's wearing them. That's where she wants to go. You talked about your wife like you are hitting a lot of different demographics. How do you do that? How do you appeal to so many?

[Michelle Gass]

Yeah, well, I would say it does start with the brand. And we like to say that Levi's operates at the center of culture and we're hitting a new stride with the brand. The brand has been strong for a long time. Last year it went up a notch. We had this fantastic partnership with Beyonce that moved into a partnership with Shaboozy. And this year we launched our brand campaign at the super bowl. And it was the perfect time because Levi's Stadium was hosting the super bowl and we hadn't been on the super bowl in over 20 years. But it wasn't about launching an ad for the Super Bowl. It was about launching our campaign. And we call it Behind Every Original, which is a global campaign and leans in to what Levi does best, across sports, across fashion and music. And so if you've seen the ad, it really does bring that to life and has artists like Doshi or sga Basketball great. And, and Rosie. And I like to talk about Rosie because here is this. She was part of Blackpink. 90 million followers and growing. And we're rolling that right into a collaboration with her in Asia. So that is, that is taking off as we speak. And so this is about launching, like I said, a campaign for the year. Looking ahead, we've got World cup coming up that the stadium is. Levi's stadium is hosting. We have collaborations. You know, we had our collaboration with Nike and Jordan a couple of months ago. We had people lining out the doors to get the special collab.

[Bloomberg Interviewer]

Michelle, when you talk about these partnerships with celebrities, with the artists, I know each one of them is different, but in general, are they coming to you or are you identifying them and you're going to them. How organic is it?

[Michelle Gass]

It's, it's, it's all of the above. Well, so. And it happens organically. I mean, literally. What, just at the, at the Brits, we had Harry Styles dancers all wearing 501s. I mean, this is about being at the center of culture. And the Beyonce partnership that started because she wrote a song called Levi's Jeans, but we've been friends with Beyonce for decades. Back in. Back to the 90s or Carolyn Bessette wore the 5 17s and you know, in Love Story, it's heavily featured in sales are up like 25%.

[Bloomberg Host]

Did that surprise you? Like when did you first all of a sudden notice, like, we've talked about this on air, the impact of this.

[Michelle Gass]

Yeah, well, the 90s. We've known about the 90s trend for a long time. And in fact, when you go into our stores online, go into our wholesale partners, I mean, that 90s trend is Levi's is all over it from top to bottom. I mean, one of the things we talk about when you ask about what's working, we talk about our two key strategies, which is about becoming a more DTC forward company and also evolving the brand from jeans to head to toe. We say denim lifestyle. What does that mean? It means that we want to give you the whole wardrobe. It starts with the jeans, but tops, button downs, jackets, outerwear, dresses, all through the lens of Levi's. But we're playing now in the total apparel space.

[Bloomberg Interviewer]

Michelle, perhaps it's a good segue to talk about the macroeconomic environment and potential disruptions or disruptions you've seen from higher transportation costs as a result of bringing these products from overseas into the US and indeed around the world. What has this macroeconomic backdrop over the last five, six weeks done for your business?

[Bloomberg Host]

Yeah, well, over the last year, when I think it's.

[Michelle Gass]

It's been a really uncertain time. You know, I take a step back. You think about the company LS&CO. We've been around for 170 years. We've weathered lots of storms and navigate, and it goes back to who we are as a brand. During times like this, people do. We have to deliver, we have to execute, but they really do go to brands that they trust, that they love. We offer quality, we offer great value, we offer durability. To date, our consumer has proven resilient. I mean, you see that in our numbers. You know, we are bringing them a lot of innovation. I think, you know, if pressures come on the consumer, when that, when the, when the wallets get tighter, you know, we have to up our game, right? Wallets get tighter, we have to work harder. And that's what we're doing. We offer great red tab right down the middle. We offer signature by Levi Strauss, which is an awesome value. That business was up 16%. It's in the $20, 25 range. And then we offer blue tab premium Japanese denim. You know, you can buy a pair of jeans from Leo's now at like $200. So we're serving every customer need. But know that we are constantly just making sure that we can address the needs of the consumer in the moment, whatever that moment might be.

[Bloomberg Host]

Love talking fashion, love talking the collaborations. I also, though, do love the nitty gritty of, like, supply chains. And what a company like you that has been around for so long and seen a lot of different market cycles. What is your supply chain? And have you kind of spread it around based on what we've seen, not just in the last year, but even coming off the pandemic, that reminded us supply chains can be impacted dramatically when they're focused in one area.

[Michelle Gass]

Yeah, that's right. We have a robust, very diversified supply chain across many, many countries. We have a really strong team that is agile and responsive and so, and these, these relationships with our suppliers go back decades and decades. So we have tremendous partnerships. And as we've navigated things like tariffs, everybody has stepped up to help us, you know, determine what the next steps are there. You know, just to, just to put it out there on tariffs. I mean, everything that we've guided the street includes tariff assumptions on, call it the original reciprocal tariffs at a higher rate, at that 20% incremental rate. You know, there's been recent news of it going down back to 10%. We haven't baked that into our numbers yet. One could say there's upside. There could mean up to $35 million in EBIT or $0.07 of EPS. But we've held back just knowing that there still is uncertainty out there. As you were, as you were saying,

[Bloomberg Interviewer]

one question we asked outgoing CFO Harmeet Singh in the last year in the wake of tariffs has been about moving production to the United States. He said, no way. That's not happening. Are you sticking by that?

[Michelle Gass]

We are sticking by that. Yeah. That is an industry that really has shifted overseas. And like I said, because we have these enduring, long lasting relationships, I know we'll be able to navigate whatever's ahead on that front.

[Bloomberg Host]

All right, so, you know, a company like you guys, our whole Bloomberg team is like, ask Michelle. This is. But we're curious about your prospects for reaching 10 billion in revenue five years, seven years. How are you guys thinking?

[Michelle Gass]

We have, we have not put a number out there, but you're a date out there.

[Bloomberg Host]

And like, do you feel like you can take this momentum and how far can you carry it out? Do you feel comfortable?

[Michelle Gass]

Yeah, what I, what I can say. And we have, I think it's important to have bold goals. Right. So you put the 10 billion, we've put the 15% EBIT. I think if you look at the progress over the last couple of years, take revenue, we came off of 7% growth last year that was up from the prior year. This year we're again guiding mid single digits. We just had a blowout quarter at up 9%. So I think it's safe to say that you can count on consistent sustainable growth and then on ebit, on profitability, we're making that March to 15% again. A few years ago we were 9, 10%. Last year about 11 and a half. We put them, we just said we're taking our guide up yesterday to 12%. So you see that sequential progress and you know, five years keep doing that. We'll let you guys do the math. But we're, but we're confident. I mean like I said, the exciting thing, we are like you have visibility, the strategies are working. We've made some choices the last couple of years. We've, you know, we sold the Dockers brand so that we could really focus on the Levi's brand and there's so much opportunity.

[Bloomberg Interviewer]

So certainly fashion is working in your favor right now. But we know the industry is fickle and consumers are fickle. What happens or what do you do rather to make sure that when the trends do change, you move with them?

[Michelle Gass]

Yeah, well, as the category leader in denim, let's start there. It's our responsibility to fuel the trends. You know, the denim category is growing, it's accelerating.

[Bloomberg Host]

I have more denim in my. No, seriously, nowadays I think in my wardrobe that I have in, in a long, long time.

[Michelle Gass]

And I.

[Bloomberg Interviewer]

But it's not always like that.

[Michelle Gass]

But, but I would say though, but this, but this evolution to denim lifestyle or I'll say lifestyle head to toe, that's not all denim. Right? It is fine if you're buying a rib cage, wide leg, pair of jeans, what's the perfect top that goes with it, which is going to be different than a low rise. Right. And so now that we're playing in this broader space space which basically increases our addressable market by 15x, we're playing in that 1 trillion market in apparel that requires focus and discipline. But we really up leveled our capabilities to do that. And you know, if you just take this last quarter our tops business was up 13%. It's only 20% of our business. So when you think about all that upside. So we now and 40% of our business is non denim. So yeah, that's interesting. Just denim anymore for Levi's.

[Bloomberg Host]

So what is the biggest opportunity or categories that are not yet tapped that could be big for you guys?

[Michelle Gass]

Yeah, I would say a couple of things. First, when we think about gender, women's is not quite 40% of our business. Last I checked, women's has a big play in the apparel market.

[Bloomberg Host]

Closets a lot bigger than my just saying.

[Michelle Gass]

But so there's still that should be at least half our business. So we're expecting tremendous growth there. I was just talking about head to toe. We always will be the leader in bottoms and denim bottoms, but tops. So in our business we sell two bottoms to every top, which by the way, that used to be like five, five bottoms to every top. That should be the other way around. Minimally one to one. That is all white space for us. And then we have amazing growth ahead of us in expansion. You know, there's still room to grow in the US but you think about these international markets. In some cases we're just getting started there. So as we look ahead and say how are we going to go from 6 point something to 10 billion? We can chart that out and we feel very confident.

[Bloomberg Host]

Thank you. Thank you. Please come back soon. We would love it.

[Michelle Gass]

Thank you. Well, thanks for having me.

[Bloomberg Host]

Yeah, we loved it. President and CEO of Levi Strauss and Company. Of course she is Michelle Goss joining us here in studio.

[Bloomberg Interviewer]

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