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Narrator/Advertiser
There's more to investing than stocks and bonds. With Ibid, you can broaden your investment mix and get bitcoin exposure. Learn more about ibid with iShares by BlackRock. The market is yours.
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Host - John
Better doubles down on the AI race. But with a product that is quote, small and fast, will it be able to compete with the biggest players? And denim demand has Levi's shares zipping on up with help from a 90s fashion icon and a hit team TV show. We break it all down live from here in San Francisco for Wednesday, April 8th. It's blue markets Daily and Diamondbury. More market details to come. But first, to set the stage a little bit, I'm zooming in live from San Francisco at the moment. I'm literally at the one hotel with a great view at the bay for a couple of reasons here on this side of the United States this week. First of all, I am going to be at a big beauty event for beauty executives, something for one of the boards I'm involved with. So I'll be reporting back. And what I'm hearing is new and innovative and creative in one of the biggest sciences sectors of consumer spending and one that is driving real change in retail at the moment. Also, I'm going to try to find some time to zip around in a waymo so that when I'm back in studio, John and I can riff on it with some firsthand experience on what it's like to go in one of the autonomous vehicles coming from Alphabet, that's Google's parent company and then earnings out from Levi's. And so while here in the home of the OG of denim brands, thought we'd break it down live. But first a word from our sponsor, Charles Schwab. Trading at Schwab is powered by Ameritrade, unlocking the power of thinkorswim. The award winning trading platforms loaded with features that let you dive deeper into the market. You can visualize your trades in a new light on thinkorswim desktop with robust charting and analysis tools all while you
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Co-host - Anne Barry
uncover new opportunities with up to the minute market news and insights. ThinkOrSwim is available on desktop, web and mobile to meet you where you are so you never miss a thing. It's built by the trading obsessed to help you trade brilliantly. Learn more@schwab.com trading Levi Strauss and company
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Host - John
goes back to the 1850s here in San Francisco with the rivets and the jeans being patented in 1873. And as for those first blue jeans for women, those came about as Lady Levi's introduced in 1934. Well, fast forward a century and Levi's is now selling clothing and accessories in 120 countries with a global footprint of over 3,300 retail stores, not to mention all those department stores it features in. And then of course, there's Direct Consumer, which we're going to come back to in just a moment. Well, the company reported earnings yesterday and cited a boost in denim sales from an unexpected source. So, John, let's get cracking with those earnings results.
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Co-host - Anne Barry
That's right, here I am in New York, but I am wearing Levi's Dungaroos, Levi Strauss Co. Ticker L E V I Levi on the New York Stock Exchange market cap of $8.6 billion. And. And shares are up 13% this morning, along with a broader rise in the markets. Shares of Levi up 80% year over year. And the 2026 Q1 results that came in yesterday, net revenue of $1.7 billion was up 14% year over year. That beat expectations. And this was up across the board in all markets. And like you said, they have a global footprint. In the Americas, revenue was up 9%, Europe up 24%. And in Asia, where we've seen some companies not doing as well in China, up up 13%. So a good quarter adjusted earnings per share of 42 cents beat expectations by a nickel. And Levi raised its guidance expecting sales to rise as much as 6.5% in the upcoming quarter, which was ahead of estimates.
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Host - John
So let's just dig into the guidance piece a little bit further. Levi's did note that it could increase the rest of its 2026 guidance, and that's because of something very specific around tariffs. Currently, the company is assuming a 20% global levies rate, but President Trump has for now actually set the duty level at 10%. And that's after the Supreme Court rolled back reciprocal tariffs earlier this year. Specifically, if you remember, this was the IA tariffs, right? So these were the ones that were specifically related to national security. So if that 10% replacement tariff remains in effect, it could boost full year earnings by $35 million. One thing that was interesting here is the CFO Harmit Singh actually dared to go where a lot of companies are fearing to tread at the moment, saying that the company could be refunded as much as $80 million. Again, that's after the Supreme Court struck down those IPA specific tariffs earlier this year. So brave CFO John going out on a limb on this one and interesting
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Co-host - Anne Barry
to see him put numbers around it. As we've heard other Companies like Costco saying that they're getting in line to try to get these refunds. So the headline out of the Levi's earnings was a focus on direct to consumer sales. Levi's press release highlighting our evolution into a DTC first denim lifestyle brand is allowing us to capture a much larger addressable market and deliver faster with more consistent growth. Let's put some numbers around that one. It was the 16th consecutive quarter of increases in DTC and for the first time and it surpassed half of sales. DTC comprised 52% of total net revenue in the quarter and sales through Levi's own stores and website jumped 16%. And here's the magic number that they were crowing about. E commerce up 17% in the quarter, supported by younger engagement. 70% of new US E com orders were from Gen Z and Millennials. That's young people buying Levi's.
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Host - John
Well that's sort of amazing and just a bit of a clarifier hit like D2C. Direct to consumer is just one of these terms. It's used synonymously with E Commerce and lots of other with other brands. And when it comes to talking about retail here, of course when think about Levi's so often we associate their distribution through things like department stores, right. And so, and other retailers. So here they're talking about D2C specifically as their own stores. So these Levi branded ones, including the store in San Francisco that I stood outside, I got off my plane, I sent it to you John, just to show I was really doing my homework on this. So it's really E Commerce plus the own branded stores that Levi's leaning into basically controlling its own destiny. And this is something that we've seen be a bit of a challenge, right. We saw Nike trying to think about how much it was going to control its own distribution and go direct to consumer with its own stores and with E Commerce versus working through wholesale channels. So you see a lot of these iconic American brands really trying to figure this out. Something also here just to dig into, let's talk about Dockers because last summer Levi's announced it was selling the Dockers brand intellectual property and operations. And that process was finalized and at the end of this past quarter. So you're seeing here Levi's really trying to shed some of the other brands and go all in on the OG on the original, on the original Levi's brand itself.
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Co-host - Anne Barry
But, but the other part of that and is that they're also expanding out lines within Levi's so they have different jeans lines like Signature which is more affordable. Red cap, it's middle market. And then blue tab, which is premium. And the CEO Michelle Gass said, we feel like we've really covered to serve the consumer across every demographic. But I'm concerned about this. I don't know if I buy a pair of Levi's, I want to know that it's that Levi's brand that I've come to know that seems to last forever. And so I'm a little hesitant to think that if they're going to introduce a cheaper Levi's brand.
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Host - John
So I got to tell you, I walked in. When was the last time you went to a Levi's store? Because I actually spent quite a while browsing in there last night. Have you roamed around one lately?
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Co-host - Anne Barry
Not lately. And I think that's a great point because I get my Levi's at Macy's and so I noticed, and this was 10 years ago, but when I went to the Levi's store in San Diego, great selection, but the price was higher than I might find at a Macy's or something like that. So it's. It's been a while.
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Host - John
Well, I gotta tell you, I was walking around yesterday and I did see blue tab in one particular area of the store and it was sort of interesting. There were. It's described as being premium and it was definitely more sort of design focused because when I went and picked up some of the blue tab items it had, for example, there was a denim jacket with multiple shades, there was dark denim, there was light blue denim, and every kind of denim other than sort of torn denim. And so clearly they're trying to lean in to much more sort of design heavy products in that kind of area. I did also roam around. I got very excited because according to this Levi outpost here in sf, Low Rise is back. Which I've been waiting for forever. I've been waiting for Low rise the Same time the 90s skinny jeans to come back. Exactly like skinny jeans came back. I was so excited. I was hoping that Low Rise would come back. According to Levi's, they are back. They had low rise boot cut. They did not have low rise skinny. But I'm waiting with bated breath because I think it's just a matter of time. Well, you touched on China, John. The company did highlight success in China. The business has turned positive for the first time in several quarters. And again, simplification being really key to that. Again, contrast with Nike, where we saw their earnings come out recently, that iconic American brand having the opposite side set of issues in China that seeing Nike just really struggle to turn it around. Levi's, though, obviously figuring something out.
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Co-host - Anne Barry
Well, and you have put your finger on the pulse of what is happening. These low rise boot cut jeans are back. And we've talked in the past about big names having a big impact on denim. You know, last summer, of course, we saw Sydney Sweeney for American Eagle. And a couple of years ago, Beyonce launched a global partnership with Levi's after her hit 2024 song Levi's Jeans. And and apparently this was in an article. The newest driver for denim is not a paid placement, but the resurgence of a cultural figure. Here's Michelle Gass, president and CEO of Levi's from yesterday's earnings call.
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Michelle Gass (Levi's CEO, quoted)
Another great example of the organic strength of our core is the 25% increase in our iconic 517s which were famously worn by Carolyn Bessette and prominently featured in the popular show Love Story.
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Co-host - Anne Barry
So, Ann, she's referring to the TV show, the series Love Story, John F. Kennedy Jr. And Carolyn Bessette, which came out in February. So it was only a few weeks into Levi's reporting quarter, but there we saw the CEO of Levi's saying that a show like this can have a big impact on interest.
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Host - John
So I haven't seen it yet. Have you, have you watched the TV series? I haven't, not yet. Not yet. I'm really excited to see it because I do remember Carolyn Bassett was like the pinnacle of sort of unlike natural sheets. Yes. And you know, there was the boot cut jeans. So this is a throw out to the 90s. There's also the headbands. It's meant to be coming back. It's sort of extension of this quiet luxury trend that we've seen. It's not about lots of monochrome. I'm wearing my black turtleneck now. We're most in keeping with that. But lots coming out there that I'm sure are going to move the needle for various trends in fashion this quarter. Well, just taking a quick look to what Levi's is doing in terms of driving its share price forward. The company did return $214 million to shareholders last quarter, a whopping 160% plus increase over the prior year. That's through both dividends going up about 5% year over year and also an acceleration in its share repurchase program. So shareholders pretty happy about that set of capital allocation decisions.
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Co-host - Anne Barry
So, Ann, let's just put a coda on this conversation because you are there in San Francisco, of course, Levi's stadium is nearby. It's the home of the San Francisco 49ers. And I looked this up. The next scheduled event at that venue is the FIFA World cup this summer. So there aren't many tickets available for any events until then. And then ed Sheeran on July 25 and there are tickets available. So if you are there on July 25th or any listeners, you can go
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Host - John
to Levi's Stadium team team trip to hear Ed Sheeran for sure playing here in San Francisco. Well, just a last note, which is about the longevity of the Levi family and having impact on the Bay Area. So again, Levi Strauss and company, the company goes back to the 1850s and today there is real presence in San Francis. And that's because one of the heirs to the Levi Strauss and company fortune, that's Daniel Lurie, was sworn in as mayor of San Francisco in January of 2025. So still very much making his mark. And I actually talked to a lot of people when he got elected and there was a real sense of excitement that perhaps this was going to be the Mike Bloomberg of the west coast, someone who is independently wealthy and therefore perceived to be perhaps above the pressures of I'm not going to use the word corruption, I'm not going to use the C word. But you know, with having the independence to be able to make the difficult positions because they weren't ultimately trying to get some kind of commercial outcome for themselves because they're immune from it given their own net worth. So be interesting to see how that pans out. While Levi's share price has been bouncing around, but overall very positive. Looks like it's going to be settling up in that 10% zone as we move through the trading session. Well, let's take a break and when we come back, a spin through the headlines that have been moving the markets today.
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Co-host - Anne Barry
Vaneck's got a question for the market.
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Host - John
Ask away.
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Co-host - Anne Barry
What if energy, gold and infrastructure, long ignored by many investors, are becoming increasingly important again?
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Host - John
Vaneck shares that the assets building the future aren't all in tech. Data centers need electricity, AI needs copper. And gold is signaling that the old rules about money, debt and currency could be shifting. This is something Vaneck's Real Assets team has been highlighting for years.
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Co-host - Anne Barry
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Host - John
Learn more@vaneck.com Brewrax that's Vanec.com Brew R
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Co-host - Anne Barry
A A X Read Fun Disclosures in the podcast Description
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Colgate Advertiser
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Co-host - Anne Barry
How?
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Colgate Advertiser
The clinically proven formula is powered by Colgate's hydrogen peroxide complex. It works at the molecular level to gently dissolve stains deep within the enamel where your brush can't reach. It's proof that daily routine can be remarkable. That's the science of wow.
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Host - John
Colgate Optic white well, it's 4pm on the east Coast. The markets have closed and we don't have a ticker tape, but we'll throw it over to our human ticker, our
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Co-host - Anne Barry
producer, John that's right, The S&P 500, the Dow and the NASDAQ all finished up over two and a half percent today. Of course, with the announcement of a ceasefire in the Middle east, the price of Brent crude, the global benchmark for oil, fell 13% to around $95 a barrel, its lowest in a month. The price still remains about 25% higher than it was before the war, but of course is showing signs of easing. This led to a broader rally in travel stocks, which have been burdened by rising fuel costs. Shares in Carnival Cruise lines ticker CCL were up as much as 14% today, becoming one of the top performing stocks in the S&P 500, and Norwegian Cruise Lines was up around 7%. Royal Caribbean Group advanced 4 well, switching
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Host - John
gears, Meta shares jumped over 9% today. That's after the company debuted a new AI model called Museum Spark. The large language model will power queries in the Meta AI app and will eventually expand across Facebook, Instagram and WhatsApp. This marks Meta's first major AI announcement since hiring Scale AI's Alexander Wang nine months ago. Wang, you may recall, joined Meta as part of the company's 14 plus billion dollar investment in the software company scale AI. That's it for today's Brew Markets Daily.
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Co-host - Anne Barry
Brew Market Daily is hosted by Anne Barry and produced by John Pratteau, Talk of Della Teef Avenue Leroy and Emily Milian. Our Technical director is Uchenawa Ogu, Brittany De Taco is our audio engineer and the President of Morning Brew Inc. Is Devin Emery.
- [15:57]
Host - John
Wake up tomorrow with the Morning Brew newsletter and tune in to Neil and Toby on Morning Brew Daily.
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Abercrombie Advertiser
Put together your summer wardrobe with Abercrombie first step New Denim Abercrombie added new linen blend jeans to their lineup. They're really lightweight and a comfortable cotton linen blend you need for summer. Their Archive shirt is your next must have cut in a 90s inspired oversized fit that gives a put together but relaxed look. Pair it with their classic Poplin short and you have your new go to outfit for the season. Set your wardrobe up with Abercrombie this summer. Shop in the app online and in stores.