Levi Strauss & Co (LEVI) Citi’s 2026 Global Consumer & Retail Conference 2026 summary

Strategic transformation and growth initiatives

• Focused on transforming from denim bottoms to a broader denim lifestyle brand, exiting low-margin businesses like Dockers and Denizen to accelerate core growth.

• Strategic pillars include being brand-led, DTC-first, and powering the portfolio with Levi's and Beyond Yoga.

• Product pipeline improvements and expansion into premium denim, tops, and women's categories are driving growth.

• Collaborations and global campaigns, such as Super Bowl and partnerships with brands like Air Jordan, are elevating brand momentum.

Channel, category, and geographic performance

• DTC business is growing high single digits, with e-commerce now 10-11% of sales and targeted to reach 15%.

• Wholesale remains important but will grow slower than DTC; U.S. DTC now 45% of business, Japan DTC 75%.

• Women's business has doubled in a decade, now 40% of sales, with a goal to reach parity with men's over time.

• Tops now over 20% of sales, with strong growth in sweaters and outerwear; aim for a 1:1 ratio with bottoms.

• Americas expected to grow low single digits, Europe mid-single digits, Asia mid-to-high single digits.

Financial outlook and margin expansion

• Operating margin improved from ~9% in 2023 to mid-elevens in 2025, with 2026 guidance close to 12%.

• Path to 15% margin includes 30-40bps annual gross margin expansion, SG&A leverage, and improved distribution efficiency.

• Distribution network modernization underway, with transition pain expected to subside in the second half of the year.

• Tariff impact in 2026 is about 150bps on gross margin; current guidance assumes 20% tariffs, but administration is at 15%, offering potential upside.

• Capital spend remains at 4% of revenue, with disciplined approach to excess cash and potential for increased marketing or shareholder returns.