Good morning. Both denim and western fashion trends are dominating pop culture this year, and Levi Strauss & Co., a retail mainstay for over a century, is embracing a denim strategy, even including the company's CFO, who is embracing it and incorporating it into his own wardrobe.
I recently had a video call with Harmit Singh, Levi's chief financial officer and growth officer. “Western style is at the core of who we are,” he said. “We're all about the denim lifestyle, head-to-toe style.” He pointed to a cowboy hat on his desk and tilted it up lightly. He was wearing a western denim shirt and Levi's 517 bootcut jeans. That day, he said, he had a meeting with investors and was dressed for the occasion to show off his best-selling products. “Plus, I have a ton of 501s in my closet,” he added.
Levi Strauss was founded in 1853, introducing the riveted 501 jeans. Singh, who has been the company's CFO since 2013, knows Levi's products and operations inside and out, which is a big part of his job. In January 2023, he expanded his role to include head of growth. He was tasked with acquiring ownership of corporate strategy and global retail real estate. Singh's big focus will be to grow Levi's direct-to-consumer business (DTC) through the company's own stores and e-commerce.
In the second quarter, the 501 grew 16 percent DTC. Other key products, such as western shirts, saw particularly strong sales, especially among women, which increased 40 percent. Levi's global women's business grew 22 percent DTC in the second quarter. Women's represents one-third of Levi's total business, Singh said. “From our perspective, there's no reason why women's can't represent half of our business,” he said. “We can double our women's business over the next six to seven years while growing our men's business.”
The 171-year-old company, led by CEO Michelle Gass, aims to lead the way in trends, from skinny jeans to low-rise jeans, dad jeans to loose jeans, Shin said. Levi's is also at the center of culture, including music, art, design, fashion and sports.
For example, in 2023, Levi's ran its first brand activation at the Cowboy Christmas trade show during the PRCA National Finals Rodeo, which Singh calls the “Super Bowl of rodeos.” Levi's plans to exhibit again in 2024. And its recent 2024 Pride collection was inspired by LGBTQIA+ rodeo culture from the '70s to today.
Levi's is also active in collaborating with stars. In April, he was in charge of costumes for many artists, including Tanner Adel and Dillon Francis, at the Stagecoach festival, one of the biggest country music festivals in the country.
But earlier this year, there was an unexpected star endorsement from Beyoncé, one of the most popular artists on the planet. “It's fair to say she's at the center of the culture,” Singh commented. Her album, Cowboy CarterThe album, released in March, includes the single “Levi's Jeans” featuring Post Malone.
Levi's reported second-quarter revenue of $1.44 billion, up 8%, but slightly below Wall Street expectations. Levi's continues its transformation into a DTC-first company, with DTC net revenue increasing 8% in the second quarter, with increases of 12% in the U.S. and 7% in Europe. E-commerce revenue increased 19%, driven by double-digit growth in the U.S., the company reported June 26.
Singh has made the brand a part of his lifestyle, even wearing a long denim jacket to a sustainability accounting event in London. “Most CFOs were in suits or jackets and formal trousers,” he says. He now makes it a family event, too. “My wife and millennial daughter also endorse the brand,” he adds.
Cheryl Estrada
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Leader board
Terri Ann BurrellJohn McClellan, CFO of biotechnology company Beam Therapeutics, Inc. (Nasdaq: BEAM), will leave the company on Aug. 9, 2024 to pursue a new opportunity as vice chairman of investment banking at JPMorgan Chase & Co. Beam Therapeutics has begun a search for his successor.
David Rosato has been appointed CFO of Eastern Bancshares Inc. and Eastern Bank, succeeding James Fitzgerald, who will continue in a senior advisory role. Mr. Rosato most recently served as Senior EVP and CFO of Berkshire Hills Bancorp and Berkshire Bank. Previously, he spent more than 15 years at Peoples United Financial, including nine years as Senior EVP and CFO. Mr. Rosato also served as SVP and Chief Financial Officer at Webster Financial and SVP and Asset Liability Manager at M&T Bank.
Big Deal
Default risk generally eased among publicly traded companies in the second quarter, according to research from S&P Global Market Intelligence. The firm's Risk Gauge model recorded a decline in the median default probability score in six of 11 sectors as of June 30 compared to the first quarter. The score represents the median chance of defaulting on a debt within one year.
However, the energy, consumer discretionary, materials and health care sectors all reported increases in their median default risk scores from the previous quarter. All of these sectors underperformed the broader S&P 500 index in the second quarter.
S&P Global Ratings expects defaults to slow in the coming months, projecting the trailing-12-month U.S. speculative-grade default rate to fall to 4.5% by March 2025 from 4.71% in May 2024.
Going deeper
“Goldman Sachs CEO First Bank Head to Publicly Speak About Trump Shooting” is an article by Michael Del Castillo in Fortune. Goldman CEO David Solomon, announcing growth in its global banking, markets and asset management divisions during an earnings call on Monday, told investors he was grateful former U.S. President Donald Trump was safe after the weekend assassination attempt. “Division and distrust cannot be overcome,” Solomon said. “I sincerely hope that this is a moment to inspire reflection and action, and to celebrate what unites us as citizens and as a society.” Solomon went on to say that the bank delivered a 10.9% return on capital in the second quarter and a 12.8% return on capital in the first half of the year.
Stories I've heard
“In the history of all technology, no technology has ever eliminated jobs.”
— Federal Reserve Bank of San Francisco CEO Mary Daly sounded optimistic about artificial intelligence's impact on jobs during a panel session at the Fortune Brainstorm Tech Conference on Monday. Daly noted that while companies are still figuring out how to best use the technology, there are early signs that AI is helping rather than harming workers. luck report.
