Levi Strauss beats profit forecasts, shares edge higher

Investing.com -- Levi Strauss & Co. (NYSE: LEVI) reported third-quarter results that exceeded profit expectations, sending shares up 1% after hours as the company raised its full-year margin and earnings outlook. The stock closed 4.97% lower on Wednesday.

The denim maker posted adjusted earnings per share of $0.48 for the quarter ended August 30, beating the analyst consensus of $0.36 by $0.12. Revenue reached $1.61 billion, up 4% YoY from $1.54 billion, though slightly below the $1.62 billion analyst estimate.

On an organic basis, revenue increased 5%. The company raised its full-year adjusted EPS guidance to $1.54-$1.56, with a midpoint of $1.55 slightly higher than the analyst consensus of $1.54.

"Our third-quarter performance highlighted the power of our diversified portfolio and reinforced our confidence that we have the right strategies in place," said Michelle Gass, President and CEO. "We saw strong growth in our international and wholesale businesses, and continued momentum across our lifestyle categories."

The company delivered operating margin of 13.8%, up from 10.8% in the prior year, while adjusted EBIT margin expanded to 15.5% from 11.8%. Gross margin improved 450 basis points to 66.2%. The company benefited from tariff refunds totaling $79 million, though it redeployed approximately $25 million back into the business during the quarter to support future growth.

Wholesale revenue grew 6% on both a reported and organic basis, while direct-to-consumer revenue increased 2%. E-commerce grew 10%, though DTC comparable sales growth was flat. By region, Americas revenue rose 4% on a reported basis and 2% organically, Europe increased 4% reported and 5% organically, and Asia grew 5% reported and 10% organically.

For fiscal 2026, Levi Strauss raised its gross margin guidance to up 130 basis points versus the prior year, compared to previous guidance of up 10 basis points. The company also increased its adjusted EBIT margin outlook to approximately 12.1%, up 70 basis points versus the prior year.

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