China is a top priority for the world’s biggest jean maker’s future growth Levi Strauss & Co. President and CEO Chip Bergh said Wednesday.
“China is one of my top priorities,” said Berg, in an interview on CNBC’s “Squawk Alley.”
China is only about 3% of the company’s business today. Bergh said he looks at competitors like Nike, with 20% of its business in China, and wants to turn China into Levi’s growth engine.
On Tuesday, Levi Strauss reported its first quarterly earnings since its initial public offering on the New York Stock Exchange last month. For the first quarter, Levi said it earned 37 cents per share, helped by a 7% gain in revenue. On a constant currency basis, revenue rose 11%.
Levi’s doesn’t report same-store sales but said on the company’s earnings call that sales were positive on a comparable basis.
Following the earnings report, Levi Strauss shares rose more than 5% in trading Wednesday and were up more than 25% since the stock’s debut.
In the latest period, Levi’s growth was really broad based as both its men’s and woman’s tops and bottoms businesses grew, Bergh said. This marked the sixth quarter in a row of double-digit top-line growth for Levi.
Levi’s direct-to-consumer business has been growing in the double digits for the past 12 quarters and its e-commerce business was up more than 20% last quarter.
Amazon is one of Levi’s top 10 customers online. However, Bergh said he knows that with every pair of jeans Amazon sells, it is “collecting a lot of data on our consumer that they could at some point turn and use against us.”
Europe has been a bright spot for Levi’s, growing more than 20% over the past two years, despite headwinds like Brexit uncertainly and slowing global growth.
“We’re really defying gravity over there when you consider all the headwinds,” said Bergh. However, he said China tariffs are another uncertainty the company has to watch.
Bergh emphasized that in terms of marketing, the best strategy for the brand is by word of mouth.
“The best thing we can do is just have the brand show up organically worn by people of all different backgrounds,” said Bergh. “You wear other jeans but you live in Levi’s.”
However, Levi’s has and will continue to work with celebrities, including Alicia Keys and Hailey Bieber.