Levi Strauss & Co.'s U.S. direct-to-consumer sales deteriorated against the apparel industry through July and August before improving sharply in September, according to credit and debit card transaction data analyzed by Consumer Edge.

Michael Gunther, senior vice president of research and market intelligence at Consumer Edge, said the firm drills down into U.S. consumer card data to track spending in near real time. "It covers anything that a credit or debit card can touch," he told Sourcing Journal. "It gives us a full view of the consumer economy, whether it's restaurants, apparel or TV subscriptions."

The firm's clients include hedge funds, private equity and venture capital firms, plus corporate clients monitoring competitors on a near real-time basis.

What does the card data show for Levi's?

"The brand is still underperforming the industry year over year, but the gap narrowed considerably last month," Gunther said. "The weakness through August was also broad, with the brand losing share within family apparel and accessories across every income and age group, rather than being driven by a single consumer cohort."

That breadth matters for sourcing and merchandising teams. A downturn spread across all cohorts signals a product and traffic problem, not a demographic shift that a targeted assortment change could fix.

The numbers align with what management told analysts. On an Oct. 7 earnings call, CEO, president and director Michelle D. Gass said overall results were strong but direct sales missed expectations. She cited a weaker U.S. back-to-school season and a slump in women's bottoms.

The company responded by shifting more inventory behind popular trends such as low-rise jeans, stepping up marketing to lift traffic and improving store and digital checkout conversion. U.S. direct sales turned around and women's sales picked up in September. Gass said she remains confident direct-to-consumer sales and the women's business will finish the year strong, helped by growth in Europe.

How does the data define channels?

Gunther flagged a critical measurement caveat for anyone benchmarking brands against card data. Sales through third-party partners like department stores or national retailers appear under the retailer's name, not the brand's.

A pair of Levi's jeans bought at Macy's shows up as Macy's on the card statement. Consumer Edge's direct-to-consumer figures only capture purchases where the statement lists Levi Strauss & Co., such as its own website or stores. The data covers U.S. cardholders only.

Why does the September rebound face holiday headwinds?

Gunther said the September improvement stands out because consumers remain selective on discretionary spending.

"That selectivity could become even more important if higher diesel costs flow through to household essentials like groceries and clothing, adding to inflation concerns and putting additional pressure on discretionary budgets heading into holiday," he said.

He noted the pressure points:

• Higher-income households continue to drive strength in several categories, but the resilience has not translated evenly to apparel.
• Footwear and athletic apparel remain relatively soft as shoppers defer trendy purchases.
• Households earning $150,000 or more are shopping more often at discount stores, dollar stores and resale sites, signaling a value hunt across all income groups.

"The question heading into holiday is whether Levi Strauss & Co. can build on September's rebound and capture more of that available discretionary wallet," Gunther said.

Which brands get squeezed?

Gunther described a distinct barbell effect across retail and food service, where the middle is getting squeezed. Brands with "middle-of-the-road" products that fail to stand out or offer clear value risk being ignored.

"There's a need to stand out with something more gripping, whether it's compelling value or a really interesting product, rather than just blending in," he said.

For apparel vendors, the implication is direct: undifferentiated mid-tier product faces the sharpest demand risk this holiday. Strong brands and unique products remain the key to holiday success, and Levi's momentum depends on converting value-focused shoppers who are still watching their spending.

What decides the holiday outcome?

Gunther said much of the season will hinge on macro forces beyond any brand's control. Results in the busiest shopping months "may depend on what happens to fuel prices, inflationary pressure on essentials, and overall asset markets that support high-income confidence," he said.

Real-time transaction data will continue to track the balance between basic needs and discretionary purchases as the season unfolds, giving sourcing teams an early read before official financial reports land.