Dive Brief:

• Brimming with confidence in their 170-year-old denim brand during their Investor Day on Wednesday, Levi’s executives unveiled ambitious five-year growth targets, including $9 billion to $10 billion in revenue and 15% adjusted EBIT margin. That represents 6% to 8% topline growth by 2027, up from a previous aim of 4% to 6%.

• To achieve this, Levi's will boost its direct-to-customer investment, including stores, online and other digital capabilities, with the goal of tripling e-commerce and getting DTC to 55% of annual net revenue by 2027, according to its press release. Wholesale is expected to grow by low single digits in that time, CEO Chip Bergh said.

• While Levi’s denim is its fulcrum, the company will work to diversify its portfolio, which also includes Denizen (a Levi’s value brand), Dockers and Beyond Yoga. The plan is to boost all brands’ market share “across geographies, categories, genders and channels,” and nearly double revenue from women’s and tops by 2027.

Dive Insight:

Levi's has the unique task of protecting a brand that arguably has evolved into an emblem of America itself, while updating the company's operations and global reach.

The popularity of denim waxes and wanes, but executives on Wednesday made clear that, even as they branch out into other apparel and nurture their other labels, they will protect the primacy of their flagship brand.

"Levi's is by far our single biggest asset as a company, and the brand is stronger today than at any point in its history," Bergh said. "I'll back that bold statement up with two data points. First is the record gross margins over the last few quarters. And second is the pricing power that the brand has demonstrated, with [average unit retail] up 10% year to date while we continue to grow unit volume."

But he also said that "diversification gives us some shock absorbers in these times of macro uncertainty," pointing to last year's acquisition of Beyond Yoga and a resurgence at its Dockers workwear brand. Levi's considered selling Dockers, Bergh said, but instead revamped it, giving the brand its own team; it's reconnected with a younger consumer and revenues are growing again. The company expects annual revenue growth for the Levi’s brands to be about $2 billion to $2.5 billion, and for the combined revenue of Dockers and Beyond Yoga to approach $1 billion by 2027, per its release.

The longevity of the Levi's brand doesn't derive just from the famous durability of its denim fabric, but also from its symbolism. Bergh noted Levi Strauss' "belief that business can be a force in society," noting the company's past and current efforts in civil rights, LGBTQ rights, paid leave, voting rights, environmental protection and other issues.

"And that how we do business is just as important as our business results. We are guided by this and by our desire to be on the right side of history," he said. "This company has a long history of not being afraid to take a stand on important social issues."

While it could run into trouble if the market in women's and tops doesn't grow, DTC slows down significantly, denim trends stall or the company fails to gain traction in China, Levi's has a good chance of meeting its targets, according to Wells Fargo analysts led by Ike Boruchow.

"We believe LEVI's leading market share, an emerging denim trend, and numerous sustainable top-line and margin tailwinds create a compelling setup for LEVI over the next several years," Boruchow said.