Levi Strauss said on Tuesday it is increasing its full-year revenue and profit forecasts after surpassing Wall Street expectations for the first quarter, citing steady demand for premium denim and healthy growth in its higher-margin direct-to-consumer business.
The company reported a quarter in which net revenue rose 14% to $1.74 billion, topping analysts' consensus of $1.65 billion. Adjusted earnings came in at $0.42 per share, up from $0.38 a year earlier. Comparable sales in the direct-to-consumer channel - which includes Levi's stores and its website - climbed 7% for the quarter ended March 1.
Regionally, Levi posted a 9% increase in sales in the Americas, its largest market. Europe grew 24%, while Asia sales increased 13%. Management highlighted strong performance across several product lines, noting that its premium denim Blue Tab, non-denim men's bottoms and women's denim skirts and dresses were selling well, a point finance chief Harmit Singh raised at an industry conference earlier in the year.
Facing higher U.S. import duties, Levi has been working to limit the financial impact through a combination of price increases, tighter cost controls, negotiations with suppliers and diversifying its sourcing away from heavy reliance on China. In January the company said it expected the tariffs to reduce fiscal 2026 margins by about 150 basis points - roughly $100 million - but that it planned to fully offset that impact.
On that basis, Levi now sees fiscal 2026 net revenue growth of 5.5% to 6.5%, up from its prior range of 5% to 6%. Analysts' consensus stood at an average growth rate of 5.7%, according to data compiled by LSEG. The company also raised its annual adjusted earnings-per-share outlook to a range of $1.42 to $1.48, from a previous $1.40 to $1.46.
The quarter's results and the raised outlook add to a broader industry signal that core wardrobe staples remain in demand even as consumers face pressure on lower- and middle-income household budgets. Retail peers including Abercrombie & Fitch and Gap have similarly reported that shoppers continue to buy foundational apparel items such as jeans.
Separately, financial-screening tools referenced by investors continue to surface Levi in comparative evaluations. One such tool noted that it evaluates companies using more than 100 financial metrics and has previously identified notable winners, citing Super Micro Computer and AppLovin as past examples, while assessing Levi among other coverage names.
What the quarter shows
- Revenue growth outpaced expectations, driven by both retail and regional strength.
- Direct-to-consumer sales - a higher-margin channel - continued to expand.
- Management retains a plan to offset tariff-related margin pressure through price, cost and sourcing actions.
Context and caveats
The company's ability to fully neutralize the tariff-driven margin headwind is a stated objective; Levi reported the estimated impact and the mitigation plan but has not provided further details beyond its current outlook. Continued execution on pricing, supplier terms and sourcing diversification are implicit to sustaining the updated guidance.