Levi Strauss reported strong sales growth in its latest quarter, with direct-to-consumer (DTC) sales making up more than half of its overall revenue for the first time. The company’s revenue increased by 14%, driven by a 16% jump in DTC sales through its own stores and website. Despite these positive results, Levi is still seeing growth in its traditional wholesale channel.

The growth is not solely due to increased sales volume, as Levi is benefiting from higher prices and favorable exchange rates. The company raised its guidance for the year, with full-year adjusted earnings per share now expected to be between $1.42 and $1.48. Additionally, Levi’s DTC-first strategy is starting to pay off in terms of bigger margins, although it also brings higher costs in the short term. As the company’s sales become more profitable with scale, there is potential for guidance to rise further later in the year.