Levi Strauss Says Distribution Overhaul Benefits Won't Materialize Until 2027

Levi Strauss & Co. won't see benefits from its distribution network overhaul until 2027, CEO Michelle Gass said on a Q3 earnings call Oct. 7, marking the second delay to the project's completion timeline. The company closed its Hebron, Kentucky, distribution center at the end of Q3, shifting volume to its Groveport, Ohio, facility. Gass cited complexity from the number of SKUs Levi's manages and a fire at one of its distribution centers as sources of disruption. The fire caused inventory damage that was insured and had no significant impact on financial results, the company said in a securities filing. Levi's had said in January it would complete the transition by the end of 2026 after delays forced continued operations at Hebron. The company warned that ongoing challenges could cause shipping delays, order cancellations and higher costs, affecting wholesale customer relationships. Gass called 2027 "very reasonable and realistic" for benefits to begin.