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Denim maker Levi Strauss & Co. is scaling up investment in its stores and website, as well as women’s apparel, to reach a sales target of US$9 billion to US$10 billion by 2027.
In a new set of strategic targets, Levi now sees sales growth of six per cent to eight per cent annually, up from its prior goal of four per cent to six per cent. The company also expects its own website and retail stores to generate 55 per cent of annual sales, compared with the 39 per cent they generated in the first quarter.
Levi’s revenue was US$5.8 billion in the fiscal year ended in November 2021. The announcement comes ahead of the San Francisco-based company’s meeting with investors Wednesday.
Levi’s strategy is to increasingly push shoppers toward its own branded stores and website. While the company will continue offering products at other retailers, it wants to emphasize sales via its own channels, since they are more profitable and offer more data about customer shopping habits.
“We’re intentionally focused on more premium customers, more digital customers,” Chief Executive Officer Chip Bergh said in an interview with Bloomberg News. “And that mix has resulted in a more profitable wholesale business for us.”
Levi has consistently posted profit and sales that topped analyst expectations in recent quarters. Even so, the stock has slumped this year amid a broad retreat in US equity markets. At times, shares have dipped below the US$17 level set at the company’s 2019 initial public offering.
The company said on Wednesday that it’s boosting investor returns through its share-repurchase program. It plans to buy back US$750 million of stock.
Levi also aims to nearly double the revenue it gets from women’s apparel, which currently comprises about a third of sales. The denim maker predominantly catered to men when Bergh joined the company about a decade ago, Chief Financial Officer Harmit Singh said. The company recently acquired Beyond Yoga, a women’s sportswear brand.
It will seek to boost the visibility of that brand, along with its Dockers and namesake brands, Levi said in a statement ahead of the meeting with investors.