In a Thursday interview with CNBC’s Jim Cramer, Levi Strauss CEO Michelle Gass reviewed the apparel maker’s most recent quarter and explained that strong business abroad helps shield the company from the effects of new U.S. tariffs.
“We are competitively positioned better than most as it relates to tariffs,” Gass said. “Number one, 60% of our business is international now.”
Gass noted that the denim retailer has “assumed tariffs” in the guidance for the most recent quarter — 30% from China and 10% from the rest of the world. She also said Levi’s exposure to China is minimal. The company has longstanding relationships with vendors, she continued, and since business is growing, Levi’s is able to give them more volume.
“And then, we also are looking at our own costs, and we’re taking part of it too,” Gass said. “We’re doing everything we can to protect the consumer and protect our price points.”
Levi’s posted earnings after the bell on Thursday, managing to comfortably beat Wall Street’s expectations. The company also raised its full-year guidance, citing strong demand. Shares shot up more than 7% in extended trading.
According to Gass, the Levi’s brand is “on fire” in Europe, naming Paris, Barcelona and Milan as key markets — especially among younger consumers. Gass said the brand is 170 years old and has an “incredible foundation,” but it must continue to drive relevancy. Social media is a big part of attracting younger consumers, she continued, and said the company has campaigns at music festivals and sporting events.
“Younger shoppers, in particular, today, they are learning and discovering brands in all kinds of places,” Gass said. “And we’ve got to show up where they’re engaging.”
