D2C Channels Drive Levi Strauss in Q4, With US Sales Up 11%

Labeling the company’s direct-to-consumer (D2C) business as “our overarching strategy,” Levi Strauss & Co. CEO Michelle Gass noted D2C channels drove considerable success during the fourth quarter.

D2C revenue rose 19% during the quarter and global D2C revenue increased 14%. On an organic basis, D2C revenue grew 11% in the U.S., 17% in Europe, and 8% increase in Asia. D2C comprised 45% of total organic net revenue in the fourth quarter. Overall fourth-quarter revenue rose 12%, to $1.8 billion.

“We sharpened our focus on our core strategies and accelerated our D2C transformation,” Gass said Wednesday (Jan. 29) during the fourth-quarter earnings call.

“Our strategies are driving momentum in the business, and we are entering 2025 from a position of strength. We have broader assortments, better in-stocks, and better in-store execution.”

The company’s focus on D2C proved to be a major driver of its success in 2024. Chief Financial and Growth Officer Harmit Singh noted a combination of higher productivity, better management of stores, and refined labor models contributed to improved profitability in the D2C segment.

“We really streamlined our selling model, making sure our stylists and store associates really focus on selling,” Singh explained. “Refining our labor model has led to efficiencies, and we’re just getting started. We’re upgrading our systems for better forecasting and better inventory management. We want to be a D2C-first company, and we’re making a lot of progress there. eCommerce profitability has dramatically improved. Those are the things driving the profitability of our D2C business.”

Singh’s comments reflect Levi’s efforts to optimize its D2C operations and the company’s use of technology is central to these improvements.

For example, Levi Strauss leveraged a partnership with Google Cloud to enhance its data collection and analysis, using machine learning to track purchase trends from over 50,000 points of distribution worldwide. This initiative helped the company discover that looser, baggier jeans were gaining popularity, not just with younger shoppers, but across all demographics, prompting Levi’s to adapt its designs, marketing, and inventory to align with this rising demand. By aggregating data from multiple sources, Levi’s increased its agility, enabling quicker responses to trends and refining its product offerings based on real-time insights.

Building on this technological edge, Gass guided the company as it streamlined operations by cutting lower-margin businesses, including Denizen and its shoe division, and the potential sale of Dockers.

A key move was a major marketing partnership with Beyoncé, which sparked holiday sales and brand visibility. Gass’ focus on the Levi’s brand, along with strategic shifts in women’s and denim lifestyle categories, positioned the company for growth despite challenges like a stronger dollar and tariff threats in 2025.

Gass noted the company’s goal of being a best-in-class omnichannel retailer played a crucial role in accelerating both top- and bottom-line performance.

“This year was a critical year,” Gass said. “We want to be an iconic apparel company rooted in denim. Our improved performance is a direct result of the work we have done to transform the company into a best-in-class omnichannel retailer.

“We have a strong plan for the year ahead supported by a robust product pipeline, the continuation of our marketing campaign with Beyoncé, and continued retail expansion.”

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