Levi Strauss & Co. Reports Second-Quarter 2025 Financial Results

Reported Net Revenues up 6%, Organic Net Revenues up 9%

13^th Consecutive Quarter of Global DTC Comparable Sales Growth

Gross Margin Expanded 140 Basis Points to a Record 62.6%

Operating Margin of 7.5%; Adjusted EBIT Margin of 8.3%, up 190 Basis Points to PY

Continuing Operations Diluted EPS of $0.20, Adjusted Diluted EPS of $0.22, up 37% Year Over Year

Company Raises Full Year Net Revenue and EPS Outlook Including the Impact of Tariffs

Levi Strauss & Co. (NYSE:LEVI) today announced financial results for the second quarter ended June 1, 2025.

"We delivered another strong quarter, reflecting broad-based strength across the board—clear evidence that our strategic agenda is gaining traction," said Michelle Gass, President and CEO of Levi Strauss & Co. "We're entering the second half of 2025 from a position of strength as our ambition to transform into a denim lifestyle brand and best-in-class DTC retailer becomes our reality. Levi's® is a brand that has a rich 172-year heritage and remains a global icon. As we look ahead, Levi's® has an even bolder future with a bigger legacy—and quarter by quarter, we're building it."

"Given our strong H1 and continued momentum across the business—and despite higher tariffs—we are raising our full-year revenue and EPS expectations," said Harmit Singh, Chief Financial and Growth Officer of Levi Strauss & Co. "The continued inflection of our financial performance is a direct result of our laser focus on the core Levi's® brand and our DTC-first strategy. We are fundamentally becoming a company with a higher growth rate, higher margin profile, stronger cash flows and higher returns on invested capital."

Financial Highlights

• Net Revenues of $1.4 billion were up 6% on a reported basis and 9% on an organic basis versus Q2 2024. The Levi's® brand was up 9% globally on an organic basis.
  • In the Americas, net revenues increased 5% on a reported basis and 9% on an organic basis. Within the Americas, the U.S. grew 7% on an organic basis.
  • In Europe, net revenues increased 14% on a reported basis and 15% on an organic basis.
  • Asia net revenues were flat on a reported and organic basis.
  • Beyond Yoga® net revenues increased 12% on a reported and organic basis.
• DTC (Direct-to-Consumer) net revenues increased 11% on a reported basis and 10% on an organic basis. DTC growth on an organic basis reflected a 9% increase in the U.S., a 9% increase in Europe and a 10% increase in Asia. Net revenues from e-commerce grew 13% on a reported basis and 13% on an organic basis. DTC comprised 50% of total net revenues in the second quarter.
• Wholesale net revenues increased 3% on a reported basis and 7% on an organic basis.

• Operating margin was 7.5% compared to 1.5% in Q2 2024. Adjusted EBIT margin increased 190 basis points to 8.3% from 6.3% last year on a reported basis due to higher gross margin and SG&A leverage.
  • Gross margin increased 140 basis points to 62.6% from 61.3% in Q2 2024 primarily driven by lower product costs and favorable channel mix.
  • Selling, general and administrative (SG&A) expenses were $791 million compared to $756 million in Q2 2024. Adjusted SG&A was up 5.4% to $787 million compared to $746 million last year. As a percentage of sales, adjusted SG&A was 54.4% compared to 54.9% last year, leveraging 50 basis points to prior year.
  • Restructuring charges were $7 million related to Project Fuel.
• Interest and other expenses, net, which include foreign exchange losses, were $6 million in the aggregate compared to $10 million in Q2 2024.
• The effective income tax rate was 22.3%, compared to (56.3)% in Q2 2024.
• Net income from continuing operations was $80 million compared to $17 million in Q2 2024. Adjusted net income was $89 million compared to $65 million in Q2 2024.
• Diluted earnings per share from continuing operations was $0.20 compared to $0.04 in Q2 2024. Adjusted diluted earnings per share was $0.22 compared to $0.16 in Q2 2024.

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 June 1, 2025

• Cash and cash equivalents were $654 million, while total liquidity was approximately $1.5 billion.
• Total inventories increased 15% on a dollar basis.

Shareholder Returns

The company returned approximately $51 million to shareholders in the second quarter, an 8% increase over prior year, in the form of dividends, representing a dividend of $0.13 per share.

As of June 1, 2025, the company had $560 million remaining under its current share repurchase authorization, which has no expiration date. As previously announced, the company intends to use at least $100 million of the net proceeds from the sale of Dockers^® to return to shareholders which is expected to be in the form of share repurchases.

For Q3, the company has declared an increase in the dividend to $0.14 per share totaling approximately $55 million. The dividend is payable in cash on August 8, 2025, to the holders of record of Class A common stock and Class B common stock at the close of business on July 24, 2025.

Updated Fiscal 2025 Guidance

Guidance for 2025 is based on continuing operations, reflecting the Dockers® business being reported in discontinued operations. Guidance assumes U.S. tariffs on imports from China remain at 30% and Rest-of-World at 10% for the remainder of the year.

• Reported net revenue growth raised by three percentage points: 1% to 2%, up from (1%) to (2%)
• Organic net revenue growth raised by one percentage point: 4.5% to 5.5%, up from 3.5% to 4.5%
• Gross margin: Expansion of 80 basis points, from a previous expectation of up 100 basis points, due to a 20 basis point impact from tariffs, after mitigation plans
• Adjusted EBIT margin: Maintained at 11.4% to 11.6%, up 70 to 90 basis points to prior year
• Tax rate: Maintained at approximately 23%
• Adjusted diluted EPS raised by $0.05: $1.25 to $1.30, up from $1.20 to $1.25

This outlook also assumes no significant worsening of macro-economic pressures on the consumer, inflationary pressures, recessionary concerns, supply chain disruptions, increased tariffs and retaliatory actions taken in response to such tariffs, or currency impacts. Adjusted diluted EPS and Adjusted EBIT are non-GAAP measures. 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, increased tariffs and retaliatory actions, and any future restructuring, restructuring-related, severance and other charges.

Investor Conference Call

To access the conference call, please pre-register at https://register-conf.media-server.com/register/BI5fafadf640dd4a90977faeb6d4601e40 and you will receive confirmation with dial-in details. A live webcast of the event can be accessed at https://edge.media-server.com/mmc/p/sh2qc3j6.

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™, Denizen®, Dockers® 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 3,200 retail stores and shop-in-shops. Levi Strauss & Co.'s reported 2024 net revenues were $6.4 billion. For more information, go to http://levistrauss.com, and for financial news and announcements go to http://investors.levistrauss.com.

Forward-Looking Statements

This press release and related conference call contains, in addition to historical information, forward-looking statements, including statements related to: future financial results, including the company's expectations for the full fiscal year 2025 net revenues (both reported and on an organic net revenues basis), adjusted EBIT margins, adjusted SG&A, adjusted diluted earnings per share and effective tax rate; progress against strategic priorities; the ongoing restructuring of our operations and our ability to achieve any anticipated cost savings associated with such restructuring; trajectory of direct-to-consumer business; macroeconomic conditions, including impacts of newly imposed or threatened U.S. tariffs and any additional retaliatory measures by impacted exporting countries; impacts of foreign currency exchange; capital expenditures; pricing initiatives; inventory growth; new store openings; investments in high growth initiatives; future dividend payments and share repurchases; the pending sale of our global Dockers^® business; and efforts to diversify product categories and distribution channels, and the related revenue projections. The company has based these forward-looking statements on its current reasonable assumptions, expectations and projections about future events. Words such as, but not limited to, "believe," "will," "may," "so we can," "when," "anticipate," "intend," "estimate," "expect," "project," "could" and similar expressions are used to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements are necessarily estimates reflecting the best judgment of our senior management and involve a number of risks and uncertainties, some of which are beyond our control, that could cause actual results to differ materially from those suggested by the forward-looking statements. Investors should consider the information contained in the company's filings with the U.S. Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for fiscal year 2024 especially in the "Management's Discussion and Analysis of Financial Condition and Results of Operations", "Summary of Risk Factors" and "Risk Factors" sections and its Quarterly Report on Form 10-Q for the quarter ended June 1, 2025, especially in the "Management's Discussion and Analysis of Financial Condition and Results of Operations", section. Other unknown or unpredictable factors also could have material adverse effects on future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release and related conference call may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated or, if no date is stated, as of the date of this press release and related conference call. The company is not under any obligation and does not intend to update or revise any of the forward-looking statements contained in this press release and related conference call to reflect circumstances existing after the date of this press release and related conference call or to reflect the occurrence of future events, even if such circumstances or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized.

Non-GAAP Financial Measures

The company reports its financial results in accordance with generally accepted accounting principles in the United States (GAAP) and the rules of the SEC. To supplement its financial statements prepared and presented in accordance with GAAP, the company uses certain non-GAAP financial measures, such as Adjusted SG&A, Adjusted SG&A margin, Adjusted EBIT (both reported and on a constant-currency basis), Adjusted EBIT margin (both reported and on a constant-currency basis), Adjusted EBITDA, Adjusted net income (both reported and on a constant-currency basis), Adjusted diluted earnings per share (both reported and on a constant-currency basis), organic net revenues, Adjusted free cash flow, and return on invested capital to provide investors with additional useful information about its financial performance, to enhance the overall understanding of its past performance and future prospects and to allow for greater transparency with respect to important metrics used by management for financial and operating decision-making. The company presents these non-GAAP financial measures to assist investors in seeing its financial performance from management's view and because it believes they provide an additional tool for investors to use in computing the company's core financial performance over multiple periods with other companies in its industry. The tables found below present Adjusted SG&A, Adjusted SG&A margin, Adjusted EBIT (both reported and on a constant-currency basis), Adjusted EBIT margin (both reported and on a constant-currency basis), Adjusted EBITDA, Adjusted net income (both reported and on a constant-currency basis), Adjusted diluted earnings per share (both reported and on a constant-currency basis), organic net revenues, Adjusted free cash flow, and return on invested capital and corresponding reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP. Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. Certain items that may be excluded or included in non-GAAP financial measures may be significant items that could impact the company's financial position, results of operations and cash flows and should therefore be considered in assessing the company's actual financial condition and performance. Non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgment by management in determining how they are formulated. Some specific limitations include but are not limited to, the fact that such non-GAAP financial measures: (a) do not reflect cash outlays for capital expenditures, contractual commitments or liabilities including pension obligations, post-retirement health benefit obligations and income tax liabilities; (b) do not reflect changes in, or cash requirements for, working capital requirements; and (c) do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on indebtedness. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, the company's financial results prepared in accordance with GAAP. The company urges investors to review the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures included in this press release, and not to rely on any single financial measure to evaluate its business. See "RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES" below for reconciliation to the most comparable GAAP financial measures. 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, and any future restructuring, restructuring-related, severance and other charges.

Organic Net Revenues and Constant-currency

The company reports net revenues in accordance with GAAP, as well as on an organic net revenues basis in order to facilitate period-to-period comparisons of our revenues which excludes the impact of fluctuating foreign currency exchange rates from the change in reported net revenues, net revenues derived from business acquisitions or divestitures impacting the comparable reporting period and the estimated impact of any 53rd week. The company reports certain operating results in accordance with GAAP, as well as on a constant-currency basis in order to facilitate period-to-period comparisons of its results without regard to the impact of fluctuating foreign currency exchange rates.

These measures exclude the results of our Dockers® business, which is classified as discontinued operations. The term foreign currency exchange rates refers to the exchange rates used to translate the company's operating results for all countries where the functional currency is not the U.S. Dollar into U.S. Dollars. Because the company is a global company, foreign currency exchange rates used for translation may have a significant effect on its reported results. In general, the company's financial results are affected positively by a weaker U.S. Dollar and are affected negatively by a stronger U.S. Dollar as compared to the foreign currencies in which it conducts its business. References to operating results on a constant-currency basis mean operating results without the impact of foreign currency translation fluctuations.

The company calculates constant-currency amounts by translating local currency amounts in the prior-year period at actual foreign currency exchange rates for the current period. Constant-currency results do not eliminate the transaction currency impact, which primarily includes the realized and unrealized gains and losses recognized from the measurement and remeasurement of purchases and sales of products in a currency other than the functional currency and of forward foreign exchange contracts.

The company believes disclosure of organic net revenues and Adjusted EBIT constant-currency, Adjusted EBIT Margin constant-currency and Adjusted Net Income constant-currency results are helpful to investors because it facilitates period-to-period comparisons of its results by increasing the transparency of the underlying performance by excluding the impact of fluctuating foreign currency exchange rates. However, organic net revenues and constant-currency results are non-GAAP financial measures and are not meant to be considered in isolation or as a substitute for comparable measures prepared in accordance with GAAP. Organic net revenues and constant-currency results have no standardized meaning prescribed by GAAP, are not prepared under any comprehensive set of accounting rules or principles and should be read in conjunction with the company's consolidated financial statements prepared in accordance with GAAP. Organic net revenues and constant-currency results have limitations in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies.

Source: Levi Strauss & Co. Investor Relations

The notes accompanying the consolidated financial statements in the company's Form 10-Q for the second quarter of fiscal 2025 are an integral part of these consolidated financial statements.

The notes accompanying the consolidated financial statements in the company's Form 10-Q for the second quarter of fiscal 2025 are an integral part of these consolidated financial statements.

The notes accompanying the consolidated financial statements in the company's Form 10-Q for the second quarter of fiscal 2025 are an integral part of these consolidated financial statements.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

FOR THE SECOND QUARTER OF 2025

The following information relates to non-GAAP financial measures, and should be read in conjunction with the investor call held on July 10, 2025, discussing the company's financial condition and results of operations as of and for the quarter and year ended June 1, 2025. Because the results of our Dockers® business are classified as discontinued operations, those results are not reflected in our non-GAAP measures.

We define the following non-GAAP measures as follows:

Adjusted SG&A:

The following table presents a reconciliation of SG&A, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted SG&A for each of the periods presented.

Adjusted EBIT and Adjusted EBITDA:

The following table presents a reconciliation of net income from continuing operations, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBIT and Adjusted EBITDA for each of the periods presented.

Adjusted Net Income:

The following table presents a reconciliation of net income from continuing operations, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted net income for each of the periods presented.

Adjusted Diluted Earnings per Share:

The following table presents a reconciliation of diluted earnings per share from continuing operations, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted diluted earnings per share for each of the periods presented.

Adjusted Free Cash Flow:

Adjusted free cash flow, a non-GAAP financial measure, includes net cash flow from operating activities less purchases of property, plant and equipment from continuing and discontinued operations. This measure therefore includes the results of our Dockers^® business, which is classified as discontinued operations. We believe Adjusted free cash flow is an important liquidity measure of the cash that is available after capital expenditures for operational expenses and investment in our business. We believe Adjusted free cash flow is useful to investors because it measures our ability to generate or use cash. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet, invest in future growth and return capital to stockholders.

The following table presents a reconciliation of net cash flow from operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted free cash flow for each of the periods presented.

Return on Invested Capital:

We define Return on invested capital ("ROIC") as the trailing four quarters of Adjusted net income before interest and after taxes divided by the average trailing five quarters of total invested capital. We define earnings before interest and after taxes as Adjusted net income plus interest expense and income tax expense less an income tax adjustment. We define total invested capital as total debt plus shareholders' equity less cash and short-term investments. We believe ROIC is useful to investors as it quantifies how efficiently we generated operating income relative to the capital we have invested in the business.

Our calculation of ROIC is considered a non-GAAP financial measure because we calculate ROIC using the non-GAAP metric Adjusted net income. Although ROIC is a standard financial metric, numerous methods exist for calculating a company's ROIC. As a result, the method we use to calculate our ROIC may differ from the methods used by other companies. This metric is not defined by GAAP and should not be considered as an alternative to earnings measures defined by GAAP.

The table below sets forth the calculation of ROIC for each of the periods presented.

Organic Net Revenues and Constant-Currency:

The table below sets forth the calculation of net revenues by segment on an organic net revenue basis for the comparison period applicable to the three-month and six-month periods ended June 1, 2025.

The table below sets forth the calculation of net revenues by channel on an organic net revenue basis for the comparison period applicable to the three-month and six-month periods ended June 1, 2025: