Levi Strauss & Co. Reports Third-Quarter Results

Reported Net Revenues up 4%; Organic Net Revenues up 5% Operating Margin of 13.8%; Adj EBIT Margin of 15.5% Continuing Operations Diluted EPS of $0.43; Adj Diluted EPS of $0.48 Raises Full Year 2026 Margin and EPS OutlookSAN FRANCISCO--(BUSINESS WIRE)--Levi Strauss & Co. (NYSE: LEVI) today announced financial results for the third quarter ended August 30, 2026. “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 of Levi Strauss & Co. “We saw strong growth in our international and wholesale businesses, and continued momentum across our lifestyle categories. While our direct-to-consumer business fell short of our internal expectations, we moved quickly to address the shortfall and are encouraged by the strength we are seeing heading into the holiday season, including in the U.S. Based on the acceleration in recent trends, our DTC business is on track to deliver mid-single-digit growth in the fourth quarter.” “We delivered another quarter of mid-single-digit revenue growth while navigating a dynamic operating environment,” said Harmit Singh, Chief Financial and Growth Officer of Levi Strauss & Co. “We made the decision to redeploy a majority of our tariff refund benefit back into the business during Q3 and Q4 to support future growth. Reflecting confidence in our outlook, we are raising our full-year profit guidance and plan to initiate a $100 million accelerated share repurchase program.” Financial Highlights for the Third Quarter Net Revenues of $1.6 billion increased 4% on a reported basis and 5% on an organic basis versus Q3 2025. In the Americas, net revenues increased 4% on a reported basis and 2% on an organic basis. Within the Americas, the U.S. decreased 1% on a reported basis. In Europe, net revenues increased 4% on a reported basis and 5% on an organic basis. In Asia, net revenues increased 5% on a reported basis and 10% on an organic basis. Beyond Yoga® increased 9% on a reported and organic basis. DTC (Direct-to-Consumer) net revenues increased 2% on a reported and organic basis. DTC growth on a reported basis reflected a 2% increase in the Americas, a 1% decrease in the U.S., a 2% decrease in Europe and an 8% increase in Asia. DTC growth on an organic basis was flat in the Americas and reflected a 1% decrease in Europe and an 11% increase in Asia. Net revenues from e-commerce grew 10% on a reported and organic basis. DTC comparable sales growth was flat. DTC comprised 45% of total net revenues in the third quarter. Wholesale net revenues increased 6% on a reported and organic basis, driven by growth in all segments, with particularly strong performance in Europe and Asia. Net Revenues Operating Income (loss) Three Months Ended % Increase (Decrease) As Reported % Increase (Decrease) Organic Net Revenues Three Months Ended % Increase (Decrease) As Reported ($ millions) August 30, 2026 August 31, 2025 August 30, 2026 August 31, 2025 Americas $ 839 $ 806 4 % 2 % $ 251 $ 189 32 % Europe $ 442 $ 426 4 % 5 % $ 101 $ 91 11 % Asia $ 293 $ 278 5 % 10 % $ 42 $ 33 25 % Beyond Yoga® $ 36 $ 33 9 % 9 % $ (5 ) $ (5 ) (10 )% ___________ Operating margin was 13.8% in Q3 2026 compared to 10.8% in Q3 2025. Adjusted EBIT margin was 15.5% in Q3 2026 compared to 11.8% in Q3 2025. The impact of tariff refunds contributed 490 basis points(1) of margin expansion, of which approximately 160 basis points(2) were redeployed to support the business. The tariff refund benefit, net of redeployment, was 330 basis points. Gross margin expanded 450 basis points to 66.2% compared to 61.7% in Q3 2025. The impact of tariff refunds contributed 490 basis points(1) of gross margin expansion, of which approximately 120 basis points(2) were redeployed to support the business. The tariff refund benefit, net of redeployment, was 370 basis points. Selling, general and administrative expenses (SG&A) were $836 million compared to $776 million in Q3 2025. Adjusted SG&A was up 6.2% to $817 million compared to $769 million last year. Includes approximately 40 basis points(2) of costs redeployed to support the business. The remaining increase was driven primarily by selling and distribution expenses. Interest and other income (expense), net, which includes foreign exchange gains and losses, were expenses of $2 million(1) in Q3 2026 and expenses of $11 million in the aggregate in Q3 2025. The effective income tax rate was 23.4%, compared to 21.9% in Q3 2025. Net income from continuing operations was $169 million compared to $122 million in Q3 2025. Adjusted net income was $189 million compared to $136 million in Q3 2025. Diluted earnings per share from continuing operations was $0.43 compared to $0.31 in Q3 2025. Adjusted diluted earnings per share was $0.48 compared to $0.34 in Q3 2025. The impact of tariff refunds contributed $0.16(1) of EPS benefit, of which approximately $0.05(2) was redeployed to support the business. The tariff refund benefit, net of redeployment, was $0.11. ____________________ (1) The impact of the International Emergency Economic Powers Act (IEEPA) tariff refunds includes refunds of $79 million in cost of goods sold and $5 million of interest income in other income (expense), net. The tax expense impact was $20 million. (2) During the third quarter of 2026, the company redeployed IEEPA tariff refunds to support the business including additional promotion and marketing expenditures. This resulted in an additional $25 million of expense during the third quarter of 2026, of which $19 million impacted gross margin and $6 million impacted SG&A. Highlights include: Three Months Ended % Increase As Reported % Increase Organic Net Revenues Nine Months Ended % Increase As Reported % Increase Organic Net Revenues ($ millions) August 30, 2026 August 31, 2025 August 30, 2026 August 31, 2025 Net revenues $ 1,610 $ 1,543 4 % 5 % $ 4,914 $ 4,516 9 % 7 % DTC Comparable Sales Growth 0.4 % + * * * * * * Three Months Ended % Increase As Reported % Increase (Decrease) Constant Currency Nine Months Ended % Increase As Reported % Increase (Decrease) Constant Currency ($ millions, except per-share amounts) August 30, 2026 August 31, 2025 August 30, 2026 August 31, 2025 Net income from continuing operations $ 169 $ 122 39 % * $ 441 $ 342 29 % * Adjusted net income $ 189 $ 136 39 % 41 % $ 465 $ 374 24 % 22 % Adjusted EBIT $ 249 $ 182 36 % 38 % $ 608 $ 506 20 % 15 % Diluted earnings per share from continuing operations $ 0.43 $ 0.31 12 ¢ * $ 1.12 $ 0.86 26 ¢ * Adjusted diluted earnings per share $ 0.48 $ 0.34 14 ¢ 15 ¢ $ 1.19 $ 0.94 25 ¢ 24 ¢ ____________________ * Not provided + For the three-month period ended August 31, 2025 the DTC Comparable Sales Growth was in the high-single digits. Additional information regarding DTC Comparable sales growth, a key metric, is provided at the end of this press release. Additional information regarding Adjusted SG&A, Adjusted EBIT, Adjusted EBIT margin, Adjusted net income, Adjusted diluted earnings per share, Adjusted free cash flow, as well as amounts presented on an organic net revenues basis and constant currency basis, all of which are non-GAAP financial measures, is provided at the end of this press release. Balance Sheet Review as of August 30, 2026 Cash and cash equivalents were $641 million, while total liquidity was approximately $1.5 billion. Total inventories decreased 3% on a dollar basis compared to Q3 2025. Shareholder Returns In the third quarter, the company returned $61.6 million in the form of dividends to shareholders, an 11% increase over prior year, representing a dividend of $0.16 per share. The $200 million accelerated share repurchase (ASR) program launched in the first quarter of 2026 settled in the third quarter and the company took delivery of and retired approximately 1.6 million shares for a total of 9.4 million shares over the entirety of the ASR program. As of August 30, 2026, the company had $240 million remaining under its current share repurchase authorization, which has no expiration date. In line with the company’s capital allocation strategy, the company intends to enter into an ASR agreement to repurchase $100 million of its Class A common stock. The company declared a dividend of $0.16 per share, a 14% increase over prior year, totaling approximately $61 million, payable in cash on November 4, 2026 to the holders of record of Class A common stock and Class B common stock at the close of business on October 21, 2026. Fiscal 2026 Guidance Guidance for 2026 is based on continuing operations, reflecting the Dockers® business being reported in discontinued operations. Guidance includes the impact of IEEPA tariff refunds of which the company is redeploying approximately $60 million for the full year, including approximately $35 million for the fourth quarter. This assumes current tariff rates remain in effect for the remainder of the year. The following guidance is provided for the year ending November 29, 2026: Metric Updated FY 2026 Guidance Previous FY 2026 Guidance Reported net revenues growth Approximately 7.0%, due to the impact of foreign exchange 7.0% to 7.5% Organic net revenues growth Approximately 6.0% 5.5% to 6.0% Gross margin Raised to up 130 basis points to prior year Up 10 basis points to prior year Adjusted EBIT margin Expanding to approximately 12.1%, up 70 basis points to prior year Expanding to 12%, up 60 basis points to prior year Tax rate Approximately 23%, 2 points higher than prior year Approximately 23%, 2 points higher than prior year Adjusted diluted EPS Raised to $1.54 to $1.56 This includes an approximate $0.04 headwind from a higher tax rate $1.46 to $1.52 This includes an approximate $0.04 headwind from a higher tax rate This outlook also assumes no significant worsening of macro-economic pressures on the consumer, inflationary pressures, supply chain disruptions, potential tariffs or currency fluctuations. A reconciliation of non-GAAP forward looking information to the corresponding GAAP measures cannot be provided without unreasonable efforts due to the challenge in quantifying various items including but not limited to, the effects of foreign currency fluctuations, taxes, potential tariffs and refunds, and any future restructuring, restructuring-related, severance and other charges. Investor Conference Call To access the conference call, please pre-register on https://register-conf.media-server.com/register/BI30f6874931434e4392e349b637a9cb4c and you will receive confirmation with dial-in details. A live webcast of the event can be accessed on https://edge.media-server.com/mmc/p/hoe63w58. A replay of the webcast will be available on http://investors.levistrauss.com starting approximately two hours after the event and archived on the site for one quarter. About Levi Strauss & Co. Levi Strauss & Co. (LS&Co.) is one of the world's largest brand-name apparel companies and a global leader in jeanswear. The company designs and markets jeans, casual wear and related accessories for men, women and children under the Levi's®, Levi Strauss Signature™, and Beyond Yoga® brands. Its products are sold in approximately 120 countries worldwide through a combination of chain retailers, department stores, online sites, and a global footprint of approximately 3,300 retail stores and shop-in-shops. Levi Strauss & Co.'s reported 2025 net revenues were $6.3 billion. For more information, go to http://levistrauss.com, and for financial news and announcements go to http://investors.levistrauss.com. Forward-Looking StatementsRead the full story here

Levi Strauss & Co. Reports Third-Quarter Results

Inne wiadomości firmowe