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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: We're focusing on shares of Levi Strauss lower today in

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Speaker 2: a big way after the DNA maker narrowed its full

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Speaker 2: year revenue outlook. The company also revealing that it's exploring

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Speaker 2: a sale of its Dockers brand joining us now, I

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Speaker 2: am thrilled to say we have Michelle Goss. She is

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Speaker 2: Levi Strauss president and CEO. And I think a lot

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Speaker 2: of people were surprised by these results because fashion is fickle,

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Speaker 2: but Denham is back in a big way right now.

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Speaker 2: Of course, over leggings, you have this collaboration with Beyonce.

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Speaker 2: The song came out as well, and yet of course

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Speaker 2: you narrowed that revenue forecast. So how can you re

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Speaker 2: ensure reassure investors that of course Levi Strauss is on

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Speaker 2: that positive growth trajectory.

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Speaker 3: Yes, well, it's great to be here and thanks for

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Speaker 3: the question.

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Speaker 1: You know, what I would say is, first off, you know,

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Speaker 1: we're really confident in our long term strategies for the business,

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Speaker 1: and ultimately we see the business growing to about ten

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Speaker 1: billion in sales over time.

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Speaker 3: And our strategies are working.

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Speaker 1: I'm sure we'll talk about that, but let me have

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Speaker 1: a little context for the quarter. You know, despite coming

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Speaker 1: in at the low end of our guide, you know

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Speaker 1: underneath that there's a lot of strength in the business.

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Speaker 1: I mean, clearly we bet we beat our profit targets.

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Speaker 1: Our earnings were strong, and as it relates to revenue,

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Speaker 1: you know, overall we were up three percent on an

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Speaker 1: adjusted basis.

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Speaker 3: For Levi's brand was up five percent.

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Speaker 1: Yet we did have a couple areas that underperformed, namely

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Speaker 1: our China business Mexico and also on Dockers.

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Speaker 3: You know, in terms of.

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Speaker 1: China, I would say that we have our own executional

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Speaker 1: opportunities there. It's a big market. We see the long

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Speaker 1: term potential. We've changed out some leadership, and clearly issues

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Speaker 1: have been exacerbated by the macro headwinds in Mexico. We

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Speaker 1: can isolate that issue to our wholesale business there where

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Speaker 1: one of our top customers had a cybersecurity breach which.

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Speaker 3: Impacted our ability to ship.

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Speaker 1: You know, we expect sequential improvement there as well. And

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Speaker 1: then lastly with Dockers, I mean that's a brand that

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Speaker 1: for us, it's underperformed for some time.

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Speaker 3: You know, we do.

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Speaker 1: Believe that both Levi's and Dockers will ultimately benefit by

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Speaker 1: being independent businesses.

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Speaker 3: And for us, this.

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Speaker 1: Is about focus and us focus and amplifying on the

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Speaker 1: Levi's brand and also beyond Yoga, which we just acquired

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Speaker 1: a couple of years ago.

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Speaker 2: Well, I'm glad that you brought up Dockers because that's

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Speaker 2: exactly where I want to go. Of course, you said

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Speaker 2: that you're reviewing options for Dockers that could include a sale.

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Speaker 2: You have the likes of Bloomberg Intelligence coming out and

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Speaker 2: saying that if you did sell Dockers it could free

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Speaker 2: up resources to accelerate your direct to consumer expansion. But

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Speaker 2: what options do you have if a sale doesn't happen.

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Speaker 3: What else are you looking at for Dockers.

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Speaker 1: Yeah, I mean, as we shared yesterday, we are exploring

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Speaker 1: strategic options and our intention is to sell the brand

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Speaker 1: to the right potential buyer. I'm actually quite confident in that,

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Speaker 1: but we're all doing our homework around that. But to

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Speaker 1: your question, this is all about distorting our resources against

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Speaker 1: largely the Levi's brand.

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Speaker 3: We see so much.

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Speaker 1: Opportunity for that, for that brand and for that business,

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Speaker 1: and also accelerating beyond yoga as I just mentioned, But

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Speaker 1: as it relates to the Levi's brand. You know today

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Speaker 1: Levi's and for we've been in business for one hundred

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Speaker 1: and seventy years and we're really known and famous for

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Speaker 1: the blue gene of course the five oh one, but

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Speaker 1: we see an opportunity that's much greater and really evolving

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Speaker 1: the brand to stand for head to toe denim lifestyle,

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Speaker 1: and you know, that's a big part of how we're

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Speaker 1: seeing the momentum in our business. You know, we talk

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Speaker 1: about the Levi's brand being up five percent, Well, that

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Speaker 1: was driven by the strength of our direct to consumer business,

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Speaker 1: both in our stores and e commerce. DTC was up

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Speaker 1: twelve percent, e commerce up almost twenty percent, and we're

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Speaker 1: seeing that across the world. And you know, I'd say

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Speaker 1: two things underneath that real strength and opportunity in women's.

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Speaker 3: Women's is about a third of our business.

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Speaker 1: Today, that should be half, and we're well on the path.

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Speaker 1: And then head to toe, whether that's denim dressing, denim lifestyle,

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Speaker 1: and even talks to complement our bottoms.

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Speaker 3: So there's just so much opportunity. So as we.

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Speaker 1: Really focus on Levi's, like I.

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Speaker 3: Said, we see accelerating into the future.

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Speaker 4: Michelle, I'm sure a lot of investors would love to

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Speaker 4: see that continued investment. But one more on the Dockers

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Speaker 4: sale here, because the faster you would be able to

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Speaker 4: sell it, the faster you would have that money to reinvest.

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Speaker 4: You know, how soon do you think you can exit

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Speaker 4: the Docker's brand?

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Speaker 1: Yeah, I'd say we just We just announced it yesterday.

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Speaker 1: We have a great team working on it, so we're

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Speaker 1: not putting a timeline, but we'll keep you posted.

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Speaker 5: I wonder about the styles. You know, if you look

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Speaker 5: across the more expensive Japanese denim, you can see three hundred,

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Speaker 5: four hundred dollars prices for Samurai and Ironheart. You're almost

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Speaker 5: there with like nineteen thirty three five Oho ones. Do

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Speaker 5: you feel like you have any those are like two

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Speaker 5: ninety five?

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Speaker 1: Right?

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Speaker 5: Do you feel like you have any pricing power? You're

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Speaker 5: pushing higher?

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Speaker 3: Absolutely? I mean, one of the amazing things.

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Speaker 1: About this brand is just how broad we connect with

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Speaker 1: consumers across all demographics around the world, and we want

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Speaker 1: to be there for our consumers. So whether that's more

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Speaker 1: of kind of your entry level price point all the

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Speaker 1: way up to very aspirational types of denim, and we

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Speaker 1: do salvage Japanese Denim, and we're doing that around the world,

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Speaker 1: including here in the US. And I think as you

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Speaker 1: were just pointing to, you know, vintage Levi's, I mean,

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Speaker 1: you know, the real testament to the strength of this

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Speaker 1: brand is if you're buying vintage Levi's, the kinds of

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Speaker 1: prices that people will pay for that is pretty darn amazing. So,

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Speaker 1: like I said, that's all part of you know, the

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Speaker 1: long term potential opportunity for this business.

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Speaker 3: Well, it's very cool, kay.

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Speaker 5: You can get the actual genes, at least the cut

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Speaker 5: that they made in eighteen ninety. If you're more of

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Speaker 5: a thirties person, they have thirty three I think are

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Speaker 5: thirty seven. You can get forties, fifties, sixties. So I

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Speaker 5: think it's a fantastic program and obviously one of the

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Speaker 5: most iconic names in denim.

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Speaker 3: I'm so I'm so.

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Speaker 1: Glad you brought that up because you know, as you know,

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Speaker 1: given our authority and authenticity, I mean.

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Speaker 3: We actually do have a vault where we.

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Speaker 1: Have literally the original pair of Levi's genes and lots

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Speaker 1: of other iterations.

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Speaker 3: Our teams are.

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Speaker 1: Constantly kind of scouring the world looking for inspiration, and

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Speaker 1: so we do our designers do take inspiration from some

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Speaker 1: of our vintage genes and we replicate those and they're

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Speaker 1: super popular with our consumers.

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Speaker 3: Yeah.

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Speaker 2: Absolutely, you really spend the time spectrum there and brand

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Speaker 2: loyalty is there for Levi's I do want to talk

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Speaker 2: about Beyond Yoga though, and I don't know if you

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Speaker 2: have denim yoga clothes, maybe that's in the pipeline there.

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Speaker 2: But let's talk a little bit about the right down

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Speaker 2: of Beyond Yoga. I know that you recently acquired this one,

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Speaker 2: and not really asking about the magnitude, but the fact

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Speaker 2: that you wrote it down at all, I mean, what

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Speaker 2: is that say basically about whether or not it's meeting

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Speaker 2: it's targets.

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Speaker 3: What the future is there? Yeah, no great question.

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Speaker 1: So we are very committed to Beyond Yoga and we

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Speaker 1: are in the very early chapters of the potential of

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Speaker 1: that brand.

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Speaker 3: We did take a write down this.

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Speaker 1: Quarter, really reflecting the path we're on to make sure

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Speaker 1: that we have a thoughtful, prudent path on both growth

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Speaker 1: and profitability in our investments. But really this is about

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Speaker 1: again the long term opportunity for Beyond Yoga.

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Speaker 3: It had a great quarter.

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Speaker 1: We are up almost twenty percent and we've seen that

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Speaker 1: double digit growth for some time. I think importantly, we

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Speaker 1: are investing in this business and brand.

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Speaker 3: We brought in new leadership Nancy Green, who.

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Speaker 1: Is an apparel and retail veteran. She's brought in new

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Speaker 1: capabilities and team members and over time, you know, this

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Speaker 1: brand should be at least a half a billion dollars.

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Speaker 1: You know, when we think about Levi's really owning denim

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Speaker 1: and denim lifestyle, having beyond yoga, really stem the closet

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Speaker 1: into active and ath leisure.

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Speaker 3: We feel like this.

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Speaker 1: Is just a phenomenal platform for Ellis and Code to

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Speaker 1: operate in.

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Speaker 4: Michelle, I want to go to something very fun. Right,

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Speaker 4: you had teamed up with Beyonce here in an exclusive

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Speaker 4: ad campaign. Beyonce is Queen. After all, she couldn't have

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Speaker 4: come cheap. I'm wondering at the end of the day,

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Speaker 4: what does this give you? Has she helped you reach

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Speaker 4: new communities?

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Speaker 3: What's the payoffs? Yeah?

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Speaker 1: Well, first let me say, you know, we are so

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Speaker 1: honored to have this partnership with Beyonce. You know, this

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Speaker 1: comes after literally decades of having a relationship with her,

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Speaker 1: dating back even to the nineties, and we've been a

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Speaker 1: fan of Beyonce for a long time, and yeah, I

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Speaker 1: believe she's been a fan of Levi's as well, and

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Speaker 1: clearly earlier this year, we were so honored that she

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Speaker 1: named a song after us on her new album, Levi's Jeans,

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Speaker 1: and that sort of then led into a conversation of

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Speaker 1: what was possible and here we are just Monday launching this.

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Speaker 3: You know, what I would call breakthrough campaign.

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Speaker 1: I mean, while we have worked with celebrities in the

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Speaker 1: past and influencers and designers and the like, I mean

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Speaker 1: this partnership takes us to a whole new level. I mean,

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Speaker 1: she is a global icon right across art and music

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Speaker 1: and fashion, and it just made so much sense for us.

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Speaker 1: I mean, Levi's the brand is at its best when

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Speaker 1: we're at the center of culture, and there's nobody better

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Speaker 1: than Beyonce to be our partner in that and accelerating

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Speaker 1: women's I mean, you know, over the next couple of years,

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Speaker 1: our plan is to really take.

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Speaker 3: That to the next level.

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Speaker 1: So we expect, you know, through Beyonce, all that she

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Speaker 1: means and candidly the reach she has. I mean, she's

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Speaker 1: got hundreds of millions of followers. Like I said that

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Speaker 1: this is going to be a great partnership for the business.

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Speaker 5: Can I ask you just for the overall picture on labor,

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Speaker 5: what your employee head count looks like and which direction

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Speaker 5: it's going. I mean, are you looking to addmployees for

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Speaker 5: more production? Do you need to shut down in order

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Speaker 5: to write size? What are your plans in terms of

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Speaker 5: your workers?

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Speaker 3: Yeah?

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Speaker 1: So around the world Ellis and Co. We have about

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Speaker 1: twenty thousand employees.

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Speaker 3: Great. I mean, we have a phenomenal culture.

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Speaker 1: I am inspired every day whether I'm working with the

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Speaker 1: team here or out in the field, working with our

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Speaker 1: teams in our stores and our distribution centers. And as

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Speaker 1: I said earlier, our intent is to grow this business.

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Speaker 3: We're six billion today.

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Speaker 1: A little more than that taking that to ten billion

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Speaker 1: in overtime, we will be hiring more great Levi's employees

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Speaker 1: to bring phenomenal experiences to our fans all over the world.

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Speaker 1: I mean a big part of our growth strategy is

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Speaker 1: around direct to consumer and building more stores across many markets.

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Speaker 3: So for us, it's.

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Speaker 1: About growth and it's about profitable growth.

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Speaker 3: And like I said, we look forward.

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Speaker 1: To welcoming many new employees into Levi's overtime y'all.

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Speaker 3: Thanks so much.

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Speaker 5: Michelle Goss there of Levi Strauss talking to us about

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Speaker 5: their quarter and their outlook as well,