For one, dress continues to get more casual, Bergh explained on a call with analysts. That means as spaces such as offices and restaurants reopen, Americans may be more likely to pick up new jeans for work or going out than more formal clothing. The past year has also seen a sizable share of Americans change waist sizes, Bergh said, and whether they went up or down in size, they needed to buy new clothes to fit their body.

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The other factor was the shift away from skinny jeans. Even before the pandemic, Levi’s had begun to introduce roomier new silhouettes. It has continued to double down on those styles, Bergh said, and they have become “big drivers” of Levi’s business. “The looser, baggier fits are almost half of both men’s and women’s sales this past quarter,” he said on the call. “That’s a pretty significant change,” especially compared to the same time two years ago, he pointed out.

The move away from skinny jeans is fueling Levi’s overall sales

The benefit to Levi’s is bigger than just a one-time boost in jeans sales. Other retail executives, such as Richard Hayne, the CEO of Urban Outfitters, have noted that, when there’s a change in the dominant silhouette of pants, shoppers tend to change the tops and other items they wear too. Bergh pointed to this ripple effect as well on the call. “It really does present an opportunity to update people’s wardrobes broadly beyond just the denim bottoms,” he said.

A new “denim cycle,” as analysts call it, can also help to fuel sales for years as shoppers gradually adopt the new look. In the last cycle—the roughly 15-year stretch dominated by skinny jeans—sales and profits were concentrated in the first five years or so as shoppers ran out and updated their wardrobes, Morgan Stanley wrote in a research note to clients tied to Levi’s quarterly results. ”We are in the early stages of a new denim cycle that could drive revenue and profit growth for the next 5 years (at least),” the analysts said about Levi’s.

Bergh is optimistic about the future too. “It gives me a great deal of confidence as we go forward into the next couple of quarters,” he said.

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