The Western fashion cycle has put the industry in growth mode.

TD Cowen‘s retail analysts expect the denim category to increase this year as the “Western customer base expands.”

In an expert call with Leslie Ghize, executive vice president at brand consultancy firm The Doneger Group, and Prithvik Kankappa, chief operating officer at Impact Analytics, the analysts said the Western fashion cycle is expected to continue until the first quarter of 2025. There’s also evidence of an ongoing wardrobe shift that is leading to interest in new shapes and fabrics and head-to-toe denim dressing. The trends are expected to drive category spending higher.

“The key risk is demand elasticity amid price increases across the category in the past year, which have led to a decline in volumes,” the equity team concluded in a research note.

Data from Impact Analytics indicates that U.S. retailers have planned lower discounts in the first quarter of 2024 due to leaner inventory levels. The data indicates that denim has the highest double-digit percentage gains in AUR (average unit retail), along with the lowest discounts. That combination has improved gross margin dollars by a high-single-digit percent, although it has also led to some unit declines.

The current denim cycle revolves around four key trends: intellectualism and preppiness, personal style and expression, functionality in day-to-day dressing, and new innovative takes on sustainability. That’s according to the analysts in a TD Cowen report.

“The category is benefiting from higher innovation and experimentation across silhouettes and fabrics, as consumer embrace head-to-toe dressing,” they said in the report.

Though the analysts noted the Western category is well positioned due to a rising interest in Americana and patriotism, several cultural moments in fashion are driving the trend as well. Pharrell Williams’ F/W 24-25 rodeo-inspired collection for Louis Vuitton, the release of Beyoncé’s “Cowboy Carter” album, and buzz around the country music festival Stagecoach is helping Western denim reach new audiences.

Data from Impact Analytics shows that comfort-oriented styles, such as the wide leg and bootcut, continue to gain share over skinny and slim. Moreover, core black and blue shades in women’s are losing share in favor of grays and other nontraditional colors.

Fashion brands—in varying degrees—are also leaning into the cycle. Tapestry’s Coach and Kate Spade have included select footwear and handbag styles for its customers. So too has Michael Kors Holdings Ltd. for its core Michael Kors brand.

And the parent of denim brands Wrangler and Lee has leaned into collaborations that have not only deepened brand awareness with consumers, but also has turned Kontoor Brands Inc. into the master of demand creation. Earlier this month, CEO Scott Baxter said that it has amplified the Wrangler brand at events such as the ACM Awards and Stagecoach, where it is the official denim sponsor. Upcoming later this year is the first collection of country music star Lainey Wilson, which Baxter said is “on track to become the largest global collaboration to date.”

“Wrangler has embodied the lifestyle of the American West for over 77 years,” said Jenni Broyles, Kontoor’s executive vice president and global brands president for Wrangler & Lee, adding that the awareness of western fashion has been bolstered by mainstream culture embracing the look, from the cast of Yellowstone to Post Malone wearing Wrangler’s iconic 13MWZ Cowboy Cut jean at the Superbowl.

“Wrangler has been in the western lifestyle and country music business since 1947 and is currently number one in denim, bottoms and tops. We are continuing to explore new strategic partnership opportunities, as more and more brands are tapping Wrangler for its expertise in the western space,” Broyles said.

For the companies within TD Cowen’s coverage universe, the analysts cited Levi Strauss, Ralph Lauren and Boot Barn as brands that they believe will benefit the most.

Retail and luxury expert Oliver Chen said that the conversation shift from stand-alone jean bottoms and jackets to head-to-toe denim outfits bodes well for Levi’s, which it said could see 14 percent earnings per share growth this year, as well as a 3 percent uptick in revenue, in part from from higher full-price selling, international and women’s.

Chen said the introduction of the active tech pant should accelerate sales in the second half. Looking ahead, Levi’s revamping of the women’s tops business to include new silhouettes in blouses and corset sets, as well as a return to growth in European wholesale in the second half should provide additional boosts to share gains.

Analyst John Kernan, who focuses on retail and consumer brands, said Ralph Lauren’s heritage as a classic American nameplate has helped it benefit from the Western and Americana fashion shift in the U.S., where the consumer is more interested in “handcrafted, artisan work that expresses an element of nationalism/patriotism,” he wrote.

And hardlines retail and wellness analyst Max Rakhlenko said that while Boot Barn is seeing some benefit from the “Western cultural phenomenon,” the bigger benefit to the brand is from its modest expansion of the assortment and the overall core business.

Boot Barn’s CEO Jim Conroy has said in past conference calls that neither Taylor Swift’s “Eras” tour nor Beyoncé’s “Cowboy Carter” album has had meaningful impact on sales, even though some analysts in the past have disagreed. Boot Barn’s creative director Isha Nicole clarified the company’s view of “western.”

“Western is not a trend—it’s a lifestyle. And while celebrity powerhouses such as Beyoncé, Diplo, Lana Del Rey and Post Malone are introducing the masses to the western aesthetic, our most sought-after pieces are functional, everyday basics,” she said.

Nicole told Sourcing Journal that the company has seen sequential improvement month to month across all major departments: men’s, women’s, work, and accessories. That’s largely because “the pieces we offer aren’t one-and-done costume novelties, but rather everyday essentials made for functional purposes.” She said about 75 percent of the product assortment is functional basics that are replenishment items. And the company has expanded its mix to include more affordable options against the inflationary backdrop.

“We don’t attribute trends to our sales growth. We serve a customer that feeds America, builds America, and protects America—customers who rely on functional, quality pieces. However, within the contemporary fashion space, we don’t see western going away anytime soon,” Nicole said.