Levi Strauss has spent more than 150 years convincing consumers that jeans belong in almost every wardrobe.
Now, its next growth challenge is getting those shoppers to buy much more than denim bottoms.
The company is expanding into shirts, sweaters, dresses, shorts, and other lifestyle products while targeting a wider range of budgets.
At one end is Signature by Levi Strauss, a value-focused label sold through mass-market retailers.
And on the other is Blue Tab, a premium collection where jeans can cost between $200 and $350.
That strategy appears to be gaining traction, with one seasonal trend standing out: white denim sales surged 70% during Levi Strauss’s fiscal second quarter.
But Bank of America believes the broader shift is still in its early stages.
Bank of America backs Levi Strauss stock
In a note shared with TheStreet, Bank of America analyst Kendall Toscano reiterated a Buy rating and $27 price target on Levi Strauss following the company’s fiscal second-quarter results.
Toscano called the stock a compelling opportunity to own a brand moving toward “higher-quality, consistent growth.”
BofA raised its fiscal 2026 earnings estimate to $1.52 per share from $1.48.
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It also increased its estimates for 2027 and 2028, citing stronger sales in the Americas and Asia, direct-to-consumer momentum, and demand across women’s apparel and lifestyle categories.
Other Wall Street analysts also became more bullish.
JPMorgan analyst Matthew Boss raised the firm’s price target to $33 from $32 and maintained an Overweight rating.
Analyst Boss said a key theme of the quarter was broad-based and diversified growth across regions, channels, and genders.
Barclays raised its price target to $27 from $26 and also maintained an Overweight rating.
The optimism goes beyond Levi Strauss beating quarterly expectations.
Wall Street is watching whether the company can grow from a jeans maker into a broader apparel business capable of reaching value shoppers, core denim customers, and consumers willing to spend hundreds of dollars on premium products.
Despite the beat-and-raise quarter, Levi Strauss shares fell after the report as investors focused on the company’s second-half margin outlook.
But Levi’s stock remains up 17% year to date and was up nearly 2% intraday on Friday, July 10.
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Levi’s benefits from white jeans trend
Levi Strauss reported second-quarter revenue of $1.56 billion on July 8, up 8% on a reported basis and 6% organically from a year earlier.
Adjusted earnings increased 27% to 28 cents per share.
But a more important development for the company’s longer-term growth, which emerged from the earnings, may be what consumers bought.
Products outside denim bottoms accounted for roughly one-third of revenue growth during the quarter.
White denim climbed 70% as shoppers embraced a familiar summer staple in Levi’s new fits and silhouettes.
Traditionally, white jeans have offered customers a lighter summer staple. And this year, Levi’s is benefiting from the popularity of loose, wide-leg, and relaxed fits at the border, in white.
This helps Levi Strauss keep denim relevant even during warmer months, when shoppers might otherwise shift spending toward lighter, more comfortable fabrics like linen and cotton, or toward dresses and shorts.
But, the results show that consumers also bought more blouses, woven shirts, sweaters, polos, lightweight denim, linen shirts, and dresses.
The women’s business increased 11%, tops grew 5%, and shorts sales rose 11%.
CEO Michelle Gass said Levi Strauss’s move from denim bottoms into a “head-to-toe denim lifestyle” market expands its addressable opportunity by as much as 15 times.
And the results suggest that shoppers are attracted to Levi’s offerings beyond its traditional blue jeans.
That strategy could also reduce the company’s reliance on a single fit or fashion cycle.
Loose and baggy jeans remain popular, led by products including the 501 ’90s for women, 501 Loose for men, and Cinch Baggy.
But skinny, slim, straight, and boot-cut jeans still make up most of Levi’s bottoms business, giving the company exposure to newer trends without abandoning longtime customers.
Levi’s targets value and premium shoppers
Levi Strauss is also testing how widely it can stretch its pricing.
Signature, its value-focused brand, generates roughly $300 million in annual sales.
It grew by 9% in the first half of fiscal 2026 and is expected to accelerate in the second half.
Management said demand remains healthy among value-oriented shoppers.
At the premium end, Levi’s Blue Tab collection includes jeans priced between roughly $200 and $350, along with jackets and outerwear starting around $250.
Blue Tab grew about 40% during both the first and second quarters, although it remains a relatively small business.
Gass said the collection could eventually generate $100 million to $200 million or more in annual sales.
The strategy gives Levi Strauss several ways to reach consumers when spending is uneven.
A price-sensitive shopper can buy Signature products through mass retailers, a core customer can purchase traditional Red Tab jeans, and a higher-income consumer can spend several hundred dollars on Blue Tab.
The risk is that moving too far upscale could weaken the accessibility that helped make Levi’s a mass-market brand.
For now, the company says demand remains healthy across value, core, and premium products.
Levi’s online business gains momentum
Levi Strauss’s direct-to-consumer business accounted for 51% of quarterly revenue and grew 8%.
Comparable sales at company-operated stores increased 6%, marking the 17th consecutive quarter of growth.
E-commerce revenue climbed 17%, driven by higher traffic, improved conversion rates, and customers buying more items per order.
The company also reduced online promotions, helping it sell more products at full price.
Levi’s added 3 million loyalty members during the quarter, bringing global membership to nearly 50 million.
Its e-commerce business has grown almost 60% over the past three years but still accounts for only around 12% of revenue, leaving room for further expansion.
Levi Strauss also plans to open 50 to 60 net new stores this year, with most scheduled for the second half.
Stores, e-commerce, and loyalty memberships give the company greater control over pricing, customer data, and the ability to sell complete outfits rather than just one pair of jeans through a wholesale partner.
BofA looks past Levi’s Europe slowdown
Europe was one reason investors reacted cautiously to the earnings report.
Reported revenue in the region declined 1%, but BofA said the result reflected the timing of Levi Strauss’s distribution-center transition rather than weaker demand.
Excluding that impact, European revenue would have increased roughly 7%, according to the company.
Direct-to-consumer sales in Europe also rose 7%, while wholesale preorders for the second half increased by a high-single-digit percentage.
BofA expects the European business to sustain mid-single-digit growth as the timing disruption fades.
Levi Strauss is carrying out a similar distribution overhaul in the U.S., but the change has come with a cost for workers.
As TheStreet recently reported, the company is permanently closing its Hebron, Kentucky, distribution center, affecting 303 employees, as it shifts more supply-chain operations to third-party facilities.
At the company’s Q2 earnings call, it said the U.S. transition has taken longer than planned because demand remained strong during the operational shift.
The delay shifted more expected distribution benefits into the fourth quarter, adding to investor concerns about how much of Levi Strauss’s margin improvement is weighted toward the end of the year.
BofA nevertheless sees better visibility into the fourth quarter, when Levi Strauss should benefit from lower duplicative distribution costs, reduced marketing expenses, stronger seasonal volumes, and easier tariff comparisons.
Tariffs remain a risk for Levi’s shoppers
Levi Strauss’s guidance assumes a 30% U.S. tariff on imports from China and a 20% rate on goods from the rest of the world.
The company has used pricing actions and lower product costs to offset some of that pressure.
But it has not included potential benefits from lower tariff rates in its full-year outlook.
BofA estimated that lower tariffs could provide a benefit of $10 million to $12 million during the third quarter.
Levi Strauss has also paid roughly $80 million in tariffs for which it may seek refunds, although management has not included any recovery in its guidance.
How well the company manages those costs could influence future prices and promotions.
About two-thirds of Levi Strauss’s second-quarter growth came from higher unit sales, while one-third came from increased average selling prices, suggesting demand was not driven only by price increases.
BofA outlines risks behind bullish call
Levi Strauss raised its full-year organic revenue-growth outlook to between 5.5% and 6%, from 4.5% to 5.5%.
It also increased its adjusted earnings forecast to between $1.46 and $1.52 per share.
BofA maintained its $27 price target, representing about 11% upside from the price used in its July 9 report.
Toscano cautioned that fashion could shift away from denim or the Levi’s brand, consumer spending could weaken, and tariffs or promotions could pressure margins.
The company may also need to increase spending to maintain brand momentum.
Levi Strauss’s recent marketing has featured Doechii, Questlove, NBA star Shai Gilgeous-Alexander, K-pop star Rosé, and Bollywood actress Alia Bhatt.
The company said its response to branding restrictions at Levi’s Stadium during the global soccer championship generated roughly 1 billion press impressions.
Those campaigns can keep a 173-year-old brand relevant, but they require continued investment.
Levi Strauss is trying to reach shoppers across price points, product categories, and sales channels while restructuring the operations behind those sales.
Bank of America believes the transformation is still in its early stages.
Whether consumers continue buying everything from value-focused Signature apparel to $350 premium denim will determine how far it can go.
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