The '90s Are Back, and Levi's Is Cashing In
Baggy Is Back, and the 501 Is the Star
Loose, baggy, low-rise — the denim silhouettes of the 1990s are back, and Levi's is riding the wave. The San Francisco denim giant is seeing strong sales of roomier fits: the 501 '90s for women, the 501 Loose for men, and the Cinch Baggy are all moving. Shoppers are combing vintage stores for the decade's staples — Coach purses, Champion sweatshirts, Ralph Lauren pullovers — and vintage Levi's jeans are among the prizes. It's a fitting comeback for a brand founded in 1853 that became a streetwear fixture in the '90s, when Kate Moss, Princess Diana, Steve Jobs and the cast of "Friends" all wore its flagship 501s.
Revenue Up Double Digits, Guidance Raised Twice
Nostalgia is translating into numbers. Levi's first-half revenue is up more than 11% on a reported basis to $3.3 billion, and the company has raised its full-year guidance twice — an outlook analysts still call conservative. For the fiscal second quarter ended May 31, revenue hit $1.56 billion, up 8% year over year and above the $1.52 billion analysts expected; adjusted earnings per share jumped 27% to $0.28. Direct-to-consumer comparable sales have now grown for 17 straight quarters, with direct channels accounting for more than half of total revenue. The Americas grew 9%, Asia 10%, Europe 4%, and the stock is up about 17% year to date.
From Wholesaler to DTC Lifestyle Brand
The turnaround isn't just nostalgia. Levi's, privately held from 1985 to 2019, long depended on department stores and other wholesalers and fell behind rivals like Gap on e-commerce — sales cratered. CEO Michelle Gass has repositioned the company as a "DTC-first, denim lifestyle" brand, expanding beyond jeans into tops, dresses and skirts; non-denim categories now account for roughly 40% of revenue. The women's business grew 11%, tops 5% and shorts 11%. White denim surged 70% in the quarter as shoppers embraced looser fits in lighter fabrics, and a FIFA World Cup marketing moment at Levi's Stadium generated roughly one billion press impressions — the most viewed, shared and commented post in the brand's history.
Profits Lag Sales, and the Store Bet Is Risky
The boom has its caveats. Profit isn't rising as fast as sales, weighed down by marketing costs, tariffs and a shift toward outsourcing order fulfillment. Levi's is betting big on branded stores, and analysts call it a risky gamble. "If you build them and the consumer doesn't come, you're kind of screwed," BNP Paribas analyst Laurent Vasilescu said. Running its own stores demands real-estate and merchandising expertise the company never needed before, while middle- and lower-income shoppers — who skew overrepresented in its direct channels — are trimming discretionary spending. The company is pushing a premium $300 denim line as its next growth leg, though whether its core customer will follow it upmarket is an open question.
Third-Quarter Results Due This Week
Levi's reports third-quarter results this week, a test of whether the retro dividend can last. GlobalData apparel analyst Louise Déglise-Favre notes jeans sales are rising about 1.5% a year, outpacing the wider fashion market — "denim was having a bit of a moment." For Levi's, the real test comes when the '90s wave fades: can its direct channels and lifestyle lineup keep the young shoppers it has won back?