Levi Strauss & Co. exceeds Q2 market expectations, raises annual forecast

US apparel company Levi Strauss & Co. (LS&Co.) has once again exceeded market expectations in the second quarter of its 2025/26 financial year. Following the unexpectedly strong results, the denim specialist raised its annual forecast again on Wednesday evening.

In the three months to May 31, revenue amounted to 1.56 billion dollars. This represented an eight percent increase compared to the same quarter last year. On an organic basis, which adjusts for currency effects and changes in the group's portfolio, revenue grew by six percent.

Above-average growth in retail revenue

The growth driver was its own retail business, the strengthening of which is one of management's strategic priorities. Its revenue increased by 11 percent (organically +8 percent). In the wholesale business, the company achieved an increase of five percent (organically +3 percent).

Revenue for the core Levi's brand developed particularly dynamically in Asia, growing by ten percent (organically +12 percent) to 284 million dollars. In the Americas, sales increased by nine percent (organically +7 percent) to 815 million dollars. In Europe, it rose by four percent to 420 million euros; however, on an organic basis, it declined by one percent. Revenue from the sportswear brand Beyond Yoga amounted to 43 million dollars, exceeding the previous year's quarter by 16 percent.

Despite higher tariffs and negative currency effects, the company was able to increase its gross margin by ten basis points to 62.7 percent. According to a statement, this was primarily due to lower product costs and an adjustment in pricing policy. As a result, earnings before interest and taxes (EBIT), adjusted for special items, grew by 18 percent to 141 million dollars. Reported net profit rose by 30 percent to 87.3 million dollars. The quarterly surplus from continuing operations, which excludes the earnings contributions from the Dockers brand sold last year, increased by 19 percent to 94.8 million dollars.

CEO Michelle Gass anticipates further growth

In light of the surprisingly strong figures, the company raised its annual forecast again. Revenue from continuing operations is now expected to grow by 7.0 to 7.5 percent, up from the previously forecast increase of 5.5 to 6.5 percent. The target for adjusted earnings per share, previously set at 1.42 to 1.48 dollars, has been raised to 1.46 to 1.52 dollars.

CEO Michelle Gass expressed her satisfaction with the recent performance. "The Levi's brand is connecting with consumers around the world in a deeper way than ever before, and our second-quarter results are further proof that our strategies are working and our team is executing them successfully," she explained in a statement. The focused development towards a D2C-led denim lifestyle company is leading to faster growth and greater profitability.

Gass also anticipated further improvements. "While we are pleased with the progress, we are still in the early stages of our long-term growth trajectory, with more opportunities for success ahead of us than ever before," she emphasised.

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