Levi Strauss reports another strong quarter, raises FY25 guidance

JohnGollop

Levi Strauss (NYSE:LEVI [https://seekingalpha.com/symbol/LEVI]) reported better-than-expected results for the third quarter [https://seekingalpha.com/pr/20261546-levi-strauss-and-co-reports-third-quarter-2025-financial-results] and raised its outlook for the year despite expectations for the macroeconomic climate to remain “complex” and higher-than-anticipated tariffs on imported merchandise.

“With strength across channels, segments and categories, we are raising our full-year outlook and are well-positioned for the holiday season,” CEO Michelle Gass said, adding that the consistency of the company’s performance and operational agility “gives me the confidence that we will deliver sustained, profitable growth into 2026 and beyond.”

Led by strength in its direct-to-consumer channel, the 172-year old company realized a 7% increase in sales to $1.54B, beating the consensus estimate of $1.50B. Sales were up across all regions with the Americas showing a 6% gain, Europe up 5%, and sales in Asia climbing 12%, all of which were better than anticipated.

Thanks to higher prices, which helped offset the impact of tariffs, gross margin increased 100 basis points to 61.7% versus 60.7% estimates, while operating margin swelled to 10.8% from 2.3% in the same quarter last year, but less than 11.3% estimates.

Adjusted earnings of $0.34 came in 3 cents above expectations.

For the remainder of the year, Levi’s (NYSE:LEVI [https://seekingalpha.com/symbol/LEVI]) raised its FY25 guidance and now expects to earn a profit between $1.27 to $1.32 per share from prior guidance of $1.25 to $1.30, with the midpoint of the new guidance 2 cents better than expected.

Organic net revenue growth was increased to +6% from +4.5% - +5.5%, previously.

The company also raised its outlook for gross margin expansion to +100 basis points from +80 basis points, while its adjusted EBIT margin remains unchanged at 11.4% to 11.6%.

This outlook assumes no worsening of macroeconomic pressures on the consumer, inflationary pressures, supply chain disruptions, and no retaliatory tariff actions.

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