The denim brand’s earnings rose for the quarter and CEO Michelle Gass said the business is back on track.

Levi Strauss & Co. has been leaning into the direct-to-consumer business for more than a decade, shaking off the constraints of being a men’s jeans brand sold through other retailers.

But after a marketing misstep in the third quarter, chief executive officer Michelle Gass has been reminded anew of the value of a little wholesale diversification.

DTC accounted for 45 percent of Levi’s business in the quarter, but was not as strong as the company expected, growing by just 2 percent — a big step down from organic growth of 8 percent in the second quarter. Within the division, e-commerce sales increased by 10 percent, but comparable sales growth was flat.

Instead it was the wholesale business that carried the quarter with a 6 percent increase.

While Levi’s had been making a lot of noise about being a DTC-first retailer, in an interview with WWD, Gass emphasized the importance of a broad base and didn’t flinch away from what went wrong in DTC.

The CEO said store traffic waned in both Europe, where the heat waves kept shoppers away, and the U.S., where Levi’s messaging to consumers missed the mark.

, I’d say our back-to-school campaign did not meet our expectations and it didn’t drive the level of traffic and demand we anticipated,” Gass said. “The environment has gotten a lot more competitive. We’ve got a lot of people talking about denim these days, but we take accountability, I think we were out there talking about our loose fits, which still do extremely well, where there was a lot of energy and excitement around low rise for women.

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