Levi's CEO Michelle Gass Reveals New Pricing Strategies To Offset 'Very High' Tariffs: 'There's Only So Much You Can Absorb'

The fashion industry is facing major disruption from Trump’s sweeping tariffs, and Levi Strauss & Co. (NYSE:LEVI) CEO Michelle Gass has outlined the company's plan to manage these escalating trade pressures.

Targeted Price Hikes, Diversified Supplier Base

In an interview with McKinsey and Business of Fashion for the 10th anniversary of the report State Of Fashion, Gass emphasized the company’s structural advantage, with about 60% of its business being international. Gass noted that this has lessened the tariff burden compared to domestic competitors.

The company is working with its vendors to identify opportunities and enhance cost efficiencies to mitigate the impact of tariffs.

Levi’s is also implementing targeted price increases and reducing promotional events to maintain margins and offset tariffs. Additionally, the company is exploring innovative pricing for new products, leveraging consumer willingness to pay more for innovation.

“There's only so much you can absorb from the tariffs, because they're just very high,” said Gass.

When asked about the resilience of the U.S. consumer in the face of higher costs due to tariffs, Gass expressed confidence in Levi’s brand value and the company’s ability to adapt to changing consumer behavior.

The CEO also highlighted the importance of collaboration with suppliers, and other brands such as the one with Nike Inc. (NYSE:NKE) launched in July, emphasizing the need for strong relationships and flexibility in the supply chain to address potential disruptions.

Levi's Resilience Amid Tariff Pressures

These developments are particularly noteworthy in the context of the broader trade landscape. The U.S. has been at the center of significant trade tensions, with President Donald Trump imposing tariff hikes impacting clothing and other goods. Earlier this year, Budget Lab at Yale predicted apparel prices would rise 64 % in the short run and remain 27 % higher over the long term.

The potential consequences of these tariffs were also highlighted by Japanese brand Uniqlo’s CEO Tadashi Yanai, who warned that the U.S. could face severe costs from the tariffs.

However, Levi’s has shown resilience in its financial performance. The company reported a strong earnings beat in the third quarter of 2025, with quarterly earnings of 34 cents per share, surpassing the consensus estimate of 31 cents. This indicates that Levi’s is effectively managing the impact of tariffs and other trade-related disruptions.

Benzinga's Edge Rankings place Levi in the 66th percentile for quality and the 65th percentile for value, reflecting its average performance in both areas. Check the detailed report here. 

Price Action: On a year-to-date basis, the stock surged 19.12%. On Monday, Levi stock eased 0.05% to close at $20.75, as per Benzinga Pro.

READ NEXT:

• Why Nike’s Price Dip Could Mean Bigger Profits Ahead

Image via Shutterstock

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.