Good morning. Both denim and Western fashion trends are dominating popular culture this year. And Levi Strauss & Co., which has been a retail mainstay for more than a century, is doubling down on its denim strategy. That includes the company’s CFO who signed off on that strategy—and embraces it in his own wardrobe.
I recently had a video call with Harmit Singh, chief financial and growth officer at Levi’s. “The Western way is core to who we are,” Singh told me. “We are all about denim lifestyle, a head-to-toe look.” He pointed to the cowboy hat on his desk that he put on briefly. Singh was also wearing a Western denim shirt and Levi’s 517 bootcut jeans. Earlier that day, he had a meeting with investors, and dressed for the occasion to show them what’s selling, Singh said. “And I have a bunch of 501s in my closet,” he added.
Levi Strauss was founded in 1853 and introduced the riveted 501 jeans. Singh, CFO at the company since 2013, knows the ins and outs of Levi’s products and operations as it’s a big part of his job. In January 2023, he expanded his role to include growth officer. He was tasked with taking ownership of the corporate strategy as well as global retail real estate. A big focus for Singh is growing Levi’s direct-to-consumer business (DTC) via the company’s own stores and e-commerce.
In Q2, the 501 grew 16% in DTC. Its other core items like Western shirts saw particularly strong sales in women’s, up 40%. Levi’s global women’s business delivered 22% growth in DTC in Q2. The women’s business is a third of Levi’s total business, Singh said. “Our view is, there’s no reason why it shouldn’t be half our business,” he said. “We can double the women’s business over the next six or seven years while growing our men’s business.”
The 171-year-old company, led by CEO Michelle Gass, works towards taking the lead on trends in anything from skinny jeans to low-rise jeans to dad jeans to loose jeans, Singh said. Levi’s also shows up at the center of culture across music, art and design, fashion, and sports.
For example, in 2023, Levi’s had its first brand activation at the Cowboy Christmas trade show during the PRCA National Finals Rodeo, which Singh refers to as the “Super Bowl of rodeos.” Levi’s plans to have a presence again in 2024. And its recent 2024 Pride Collection was inspired by LGBTQIA+ rodeo culture from the ‘70s to today.
Levi’s also leans into star collaborations. In April, the company dressed a fair amount of artists like Tanner Adell and Dillon Francis for Stagecoach, one of the largest country musical festivals.
But there was an unexpected star endorsement earlier this year from one of the most popular artists on the planet—Beyoncé. “I’d say she is at the center of culture,” Singh commented. Her album, Cowboy Carter, released in March includes the single, “Levii’s Jeans” featuring Post Malone.
For its second quarter, Levi’s reported $1.44 billion in revenue, an 8% increase, but slightly missing Wall Street estimates. As Levi’s continues to pivot to a DTC-first company, its DTC net revenues increased 8% for the quarter, reflecting a 12% increase in the U.S. and a 7% increase in Europe. Revenues from e-commerce grew 19%, led by double-digit growth in the U.S., the company reported on June 26.
Singh has incorporated the brand into his lifestyle, even wearing a long denim jacket to an accounting for sustainability event in London. “Most of the CFOs were dressed in suits or jackets and formal trousers,” he said. He’s now also made it a family affair. “My wife and my daughter, who is a millennial, also support the brand,” Singh added.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Terry-Ann Burrell, CFO at Beam Therapeutics Inc. (Nasdaq: BEAM), a biotechnology company, will be leaving, effective Aug. 9, 2024 to pursue a new opportunity as vice chairman of investment banking at JPMorgan Chase. Beam Therapeutics has initiated a search for a successor.
David Rosato has been named CFO of Eastern Bankshares, Inc. and Eastern Bank, succeeding James Fitzgerald who will continue in a senior advisory role. Rosato most recently served as senior EVP and CFO of Berkshire Hills Bancorp and Berkshire Bank. Before that, he spent over 15 years at People’s United Financial, Inc., including nine years as senior EVP and CFO. Rosato also served as SVP and treasurer at Webster Financial Corporation and as SVP, Asset/Liability Manager at M&T Bank Corporation.
Big Deal
In the second quarter, default risk broadly eased among publicly traded companies, according to S&P Global Market Intelligence research. Its RiskGauge model recorded lower median probability of default scores across six of 11 sectors as of June 30, compared to Q1. The scores represent the median odds of default on debt within a year.
However, energy, consumer discretionary, materials, and health care all reported quarter-over-quarter rises in median default risk scores. Each of those sectors trailed the broader S&P 500 index's stock market performance during the second quarter as well.
S&P Global Ratings forecasts that defaults should slow down in the coming months, estimating the U.S. speculative-grade defaults in the previous 12 months to cool to 4.5% by March 2025 from a rate of 4.71% in May 2024.
Going deeper
“Goldman Sachs CEO is first bank leader to speak publicly on Trump shooting,” is a report by Fortune's Michael del Castillo. Kicking off an earnings call on Monday where he announced growth in Goldman’s global banking and markets and asset wealth management sections, CEO David Solomon told investors he was grateful the former U.S. President Donald Trump was safe following the assassination attempt over the weekend. “We cannot afford division and distrust to get the better of us,” said Solomon. “I truly hope this is a moment that will spur reflection and action, that celebrate what unites us as citizens and as a society.” Solomon went on to relate that the bank produced a 10.9% return on equity for the second quarter and a 12.8% return on equity for the first half of the year.
Overheard
“No tech in the history of all technology has reduced employment, not net.”
—Mary Daly, CEO of the San Francisco Federal Reserve bank, gave an upbeat view on artificial intelligence’s impact on jobs during a panel session at the Fortune Brainstorm Tech conference on Monday. Daly noted that while businesses are still figuring out how to get the most out of the technology, she saw early indications that AI is helping workers more than harming them, Fortune reported.
