Key Takeaways:
Levi Strauss & Co. (LEVI) reported first-quarter earnings that topped analyst estimates and raised its full-year forecast, signaling strong consumer demand for its denim products is offsetting pressures from U.S. tariffs. The company's stock rose more than 6% in after-hours trading.
"We’ve put a lot of proof points on the board over the last year and a half," Michelle Gass, chief executive officer at Levi Strauss, said in an interview. "The consumer is responding."
The maker of 501 jeans posted adjusted earnings of 42 cents per share for the quarter ended March 1, beating the 37-cent consensus estimate. Net revenue grew 14 percent to $1.7 billion, also ahead of the $1.65 billion analysts expected.
The strong results prompted Levi's to lift its fiscal 2026 outlook. The company now expects adjusted earnings per share between $1.42 and $1.48, an increase from its prior range of $1.40 to $1.46. The forecast for organic sales growth was also nudged higher, to a range of 4.5 percent to 5.5 percent.
A key driver of the quarter's success was the direct-to-consumer business, where comparable sales rose 7 percent. Gass noted that DTC now accounts for more than half of total revenue.
Regionally, the Americas saw organic sales climb 7 percent to $856 million. Europe grew 10 percent to $496 million, and Asia was up 12 percent to $347 million. The company's Beyond Yoga brand also saw sales increase 23 percent to $43 million.
The company also announced that Harmit Singh, chief financial officer for the past 13 years, will step down. A search for his successor has begun, and Singh will remain as an adviser during the transition.
The guidance raise suggests management is confident that its brand strength and strategic focus on DTC can sustain momentum. Investors will watch the next earnings call for details on margin progression and the search for a new CFO.
This article is for informational purposes only and does not constitute investment advice.
