Levi’s says relaxed comfort is our new standard and it’s here to stay

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“The trends of casualization that were accelerated by the pandemic on a global scale are here to stay, and the denim cycle that we started before the pandemic continues to drive growth,” Levi Strauss (LEVI) CEO Chip Bergh told analysts on Wednesday during a call on the company’s third-quarter earnings.
The cycle he is referring to was the shift from skinny jeans, which dominated for over a decade, to the wider, looser leg jeans that were in vogue in the ’90s.

As consumers refresh their wardrobes with new clothes, the denim seller said he is actively adding all kinds of jeans, especially looser and more comfortable styles.

Levi’s reported sales in the quarter were up 41% from a year ago to $ 1.5 billion. Unlike many other brands facing inventory shipment delays due to global supply chain issues, Levi’s said it sources from 24 countries and therefore is able to mitigate supply disruptions to any part of the world.
Levi's said the pandemic has likely cemented the desire for comfortable, casual clothing.

Experts also expect jeans to become more and more common at work.

“As our society has become more and more casual, we expect more jeans to be worn in once more dressy situations, like the office, once again people are returning to work in person,” said Maria Rugolo, analyst at NPD.

While the change in dress standards brought on by the pandemic appears to be boosting Levi’s denim business, the company could still be challenged by rising prices for a key raw material – cotton.

Cotton prices hit new 10-year highs, joining a long list of booming commodities and commodities. Analysts have cited several factors, including extreme weather conditions such as droughts and heat waves, to damage cotton crops in the United States. The United States is the world’s largest exporter of cotton.

It remains to be seen whether soaring raw cotton prices could eventually trickle down to consumers in the form of higher prices for jeans, T-shirts and other clothing.

Levi’s chief financial officer Harmit Singh told analysts on the call that the company had already frozen cotton prices in the first half of 2022 and did not expect to see an impact from the rising prices of cotton. ‘here there.

– CNN’s Matt Egan contributed to this story.

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