[NEW YORK] Levi Strauss maintained a full-year outlook that excludes the impact from sweeping new US tariffs that are poised to significantly raise costs for multinational apparel companies.
The San Francisco-based company said its guidance for fiscal 2025 “assumes no significant worsening” of macroeconomic pressure on consumers, supply-chain disruptions, increased tariffs or similar factors. Levi sees organic revenue growth, which excludes items such as currency impact and divestments, growing 3.5 to 4.5 per cent this year.
Shares rose 2.1 per cent at 4.55 pm in extended New York trading. Since US President Donald Trump announced the tariffs on Apr 2, the stock has declined 19 per cent.
Chief financial officer Harmit Singh said it’s “difficult to forecast or plan at this stage” for the tariffs’ impact on consumers. He said the company is focused on issues it can control such as its relationships with vendors and the cost base for its products.
Chief executive officer Michelle Gass said the company is approaching the topic of tariffs with “urgency, but not being overly reactive”.
Levi is one of the first retailers to report earnings after Trump unveiled the tariffs last week.
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The company says it sources about 5 per cent of its goods in the US from Mexico, a mid-single digit from Vietnam and 1 per cent from China. It works with 130 facilities in China, 50 in Vietnam, 37 in Bangladesh and 36 in Sri Lanka, according to a company website listing partners in its supply chain.
Gass said Levi sources from 28 countries, adding they are “the places that you’d expect in the apparel industry”.
“We are doing our homework,” she added, without offering more details on specific measures the company is taking to counteract the tariffs. If the company needs to raise prices, it would be “surgical”, Gass said, and be focused on new products that have resonated with shoppers.
In its release, the company said it has “secured the majority of inventory required to meet US orders” in the second quarter.
In the first quarter, the company posted earnings of 38 US cents a share, higher than the average analyst estimate. Levi excluded its Dockers brand, that it’s looking to sell, from its results and adjusted its outlook to reflect an expected divestment.
The company is focused on bolstering its namesake brand and increasing sales through its own channels, such as its stores and website. BLOOMBERG
