Levi Strauss & Co. warned of a delay in achieving its goal of reaching $10 billion in revenue by 2027 due to rising costs in Western countries.
The clothing company is dealing with rising costs of living that hit Western consumers. So even though that the company has expanded its store openings, it still had to deal with the capacity of customers to purchase its product offerings, according to a report on Financial Times.
It was in 2022 when the company set a target of hitting $9 billion to $10 billion in revenue by 2027. Two years into operations, it must have seen that the goal could not be realistically achieved by 2027 given market conditions and consumer spending habits.
Levi Strauss' CEO Michelle Gass conveyed to FT the company's plan to do its homework again, before they would give an exact timeline to investors regarding its revenue goals.
A company executive revealed in June that the denim maker was planning to open 100 new stores in 2024, which would be located in different areas globally.
Harmit Singh, the finance and growth chief, told FT that it is very likely for the company's main goals to be carried out in a couple of years more. He said that while the target consumers of the company in the U.S., are those who earn more than $100,000 every year were actually "in a better place" as compared to the previous year, shoppers who are budget-conscious appear to be under pressure.
Gass is now setting its eyes on winning more female shoppers since they only account for about one-third of the total number of patrons of the company. Levi plans to sell more skirts and dresses to lure this portion of the market.
Just recently, the company summoned the Beyhive when it teased a possible collaboration with Beyoncé on Instagram.
A woman wearing a cowboy hat on a horse could be seen on the post. The caption was "INTRODUCING: A New Chapter." Levi's also tagged Beyonce on her account, which sent the Beyhive world abuzz.
Levi Strauss owns more than 1,200 stores across 38 countries. For the year ending November 26, 2023, the denim company reported a net revenue of $6.2 billion, almost flat with last year.
For the second quarter ending May 26, 2024, Levi's revenue net revenues grew 8% to $1.4 billion. However, revenue from Europe fell 2% to $354 million and Asia declined 1% to $260 million.
The firm has been cutting costs under Project Fuel initiative. As part of this, the company will transition from a primarily owned-and-operated distribution and logistics network in the U.S. and Europe to one that will be more balanced between owned and third-party logistics providers.
