Online sales at apparel brand Levi Strauss & Co. were a bright spot in its fiscal Q1 2024 ended Feb. 25, 2024.

Online sales grew 12% year over year. That was on top of 14% growth in the previous year, according to the denim brand. CEO Michelle Gass attributes this growth to customer experience investments including improved search, navigation and filtering capabilities.

Other web features Levi’s is investing in include upgrading its product imagery and video, and new tools to help shoppers find the right fit.

Levi’s online sales in Q1

Online sales are part of Levi’s growing direct-to-consumer business. CEO Michelle Gass described DTC as “robust” in an earnings call with investors, according to a SeekingAlpha transcript. In addition to online sales, direct-to-consumer sales also include sales from its 500 physical stores around the globe.

“We are continuing to see strong momentum in a global direct-to-consumer business, where we have now delivered eight consecutive quarters of robust comp growth,” Gass said.

Direct-to-consumer revenue increased 10% year over year in the U.S. and increased 8% year over year globally. Direct-to-consumer sales comprised 48% of Levi’s total net revenue this quarter, a record, according to the brand.

Overall revenue decreased 8% year over year and Levi’s generated a net loss of $11 million this quarter. The brand is working to improve its profitability by cutting expenses, eliminating 15% of its SKUs, deprioritizing footwear and phasing out its lower-margin brand Denizen. Levi’s announced in January its plans to lay off 10%-15% of its workers in the first half of 2024, which it expects will save the brand $100 million in expenses this year.

“Through our transformational pivot to operating as a DTC-first company, we’re bringing operational rigor and a narrower strategic focus, which will set a solid foundation for sustainable, profitable growth,” Gass said.

A boost from Beyoncé

At the end of March, in Levis’ fiscal second quarter, singer Beyoncé released a new country music album “Cowboy Carter” with a song entitled “Levii’s Jeans.”

Gass told investors that Levi’s is honored Beyoncé would name a song after the brand.

“One of the things that really is significant about the Levi’s brand and we place a lot of emphasis and investment is making sure that Levi’s brand remains in the center of culture,” Gass said. “And I don’t think there’s any better evidence or proof point than having someone like Beyonce, who is a culture shaper, to actually name a song after us.”

Levi’s did not reveal if the song impacted its sales in its fiscal Q2.

Levi’s is No. 162 in Digital Commerce 360’s Top 1000. It is the 48th-largest seller of apparel online, based on Digital Commerce 360’s estimates of its 2023 web sales.

Levi’s earnings

For the three months ended Feb. 25, Levi’s reported:

• Net revenue of $1.56 billion in its fiscal Q1 2024. That was an 8% decrease from $1.69 billion in its fiscal Q1 2023.
• In the Americas, net revenue decreased 11% to $763 million compared with $823 million in the year-ago period.

A net loss of $11 million compared with a net income of $115 in the year-ago period.

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