Levi Strauss & Co. swung to a profit and saw revenue skyrocket 156% in the second quarter after a pandemic year in which sweats and yoga pants were preferred over jeans.
But fashion trends weren’t the only thing driving the company’s results. Fluctuating sizes also played a role.
Levi
LEVI,
Chief Executive Chip Bergh cited data during the company’s earnings call showing that 35% of U.S. consumers have seen a change in their waistlines.
“[S]ome of it is up and some of it is down. But either way, it creates another reason for people to go out and update their wardrobe,” he said, according to a FactSet transcript.
Data released in March showed that one in 10 American adults gained more than 50 pounds over the previous year. Forty-two percent said they gained more than intended, 29 pounds on average.
With vaccinations rolling out and consumers heading back to parties and other events, the need for new clothes is driving business for apparel sellers and fashion brands.
“The looser, baggier fits are almost half of both men’s and women’s sales this past quarter, and that’s a pretty significant change, especially on women’s from Q2 two years ago,” Bergh said.
“And as bottoms silhouette changes, it also has an impact on tops, it has an impact on footwear, and it really does present an opportunity to update people’s wardrobes broadly beyond just the denim bottoms.”
Levi shares rose 1.4% in Friday trading after the earnings announcement. Kontoor Brands Inc.
KTB,
parent to the Wrangler and Lee jeans brands, saw shares climb 6% in Friday trading.
Levi stock has rallied 40.7% for the year to date while the S&P 500 index
SPX,
has gained 16.1% for the period.
The 2021 Reopening Insights Report published by buy-now-pay-later financial service provider Klarna shows that an overwhelming majority (89%) of shoppers plan to refresh their wardrobes as the world starts to head back to normal activity. More than half (54%) plan to “splurge” on “going out” looks.
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“As people venture back out, returning to work and play, they want to look their best…and they don’t mind paying up to do so,” the report said.
And apparel makers and sellers shouldn’t be afraid to go a little wild.
“Consumers are tired of the same-old, same-old,” Klarna wrote.
“If you’ve got inventory that leans more eclectic or colorful, make sure it’s front and center.”
