Levi Strauss & Co. Earnings Call Transcripts
Fiscal Year 2026
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The meeting featured board transitions, approval of all company proposals, and rejection of a shareholder sustainability report proposal. Management reported strong Q1 2026 results and outlined ongoing brand and growth strategies.
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Strong growth continues with 9% organic and 14% reported gains, driven by DTC, wholesale, and innovation across all regions and categories. Margin expansion is supported by SKU rationalization, pricing, and operational efficiencies, while AI and targeted marketing fuel future growth. Leadership transition is underway, with a focus on executing sharpened strategies.
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Q1 fiscal 2026 saw 9% organic net revenue growth, double-digit gains in Europe and Asia, and strong DTC and wholesale performance. Gross margin was 61.9%, adjusted EBIT margin 12.5%, and EPS up 11%. Full-year guidance was raised for revenue, margin, and EPS.
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Accelerated growth is driven by a focused DTC-first strategy, expansion into premium and lifestyle categories, and disciplined brand elevation. Operational upgrades, AI adoption, and targeted capital allocation support margin resilience and global expansion.
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Momentum continues as the denim lifestyle transformation accelerates, with strong DTC and women's growth, premium product expansion, and disciplined financial management. Margin improvement is driven by gross margin gains, SG&A leverage, and distribution upgrades, while Beyond Yoga and global campaigns fuel future growth.
Fiscal Year 2025
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Delivered 7% organic net revenue growth in 2025, led by DTC and women's segments, with record gross margin and strong holiday sales. 2026 guidance calls for 4%-5% organic growth, flat gross margin, and continued margin expansion, while mitigating tariff and distribution headwinds.
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Q3 delivered strong 7% revenue growth, record gross margin, and robust DTC and international performance, prompting raised full-year guidance. Tariff headwinds are being mitigated, and strategic initiatives in product, marketing, and distribution are driving momentum across all segments.
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Denim is experiencing steady growth, with diverse trends and expansion into premium and Western styles. The business is shifting toward a denim lifestyle brand, growing DTC and e-commerce, and improving margins through operational focus and distribution transformation. Confidence in reaching $10 billion revenue and 15% EBIT margin is high, pending tariff clarity.
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The session highlighted a strategic transformation toward a $10B revenue and 15% margin target by 2026, driven by DTC expansion, SKU rationalization, and premiumization. Growth in women's, international, and non-denim categories, along with strong brand partnerships, support momentum despite tariff and macro headwinds.
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High single-digit revenue growth, record gross margins, and strong DTC and wholesale performance led to raised full-year guidance. Strategic focus on DTC, lifestyle expansion, and disciplined execution are driving profitability despite tariff headwinds.
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The company is executing its third transformation, focusing on DTC growth, margin expansion, and international opportunities. Exiting low-margin brands and optimizing inventory support its $10B revenue and 15% EBIT margin targets. DTC, women's, and premium products drive growth.
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Q1 2025 saw 9% organic net revenue growth, record gross margin, and strong DTC and wholesale performance. Guidance for Q2 and the full year remains unchanged despite new tariffs, with continued focus on margin expansion and global growth.
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A major transformation is underway, focusing on a DTC-first, brand-led strategy, SKU reduction, and operational agility. Growth is driven by global store expansion, premiumization, and new lifestyle categories, while Beyond Yoga targets significant scale. Gross margins and profitability are rising.
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2024 is a year of transformation, with a sharpened focus on DTC growth, portfolio streamlining, and productivity. Exits from low-margin businesses and leadership changes support a strategy to reach $10 billion in revenue and higher margins. DTC and women's categories are key growth drivers.
Fiscal Year 2024
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Q4 and full-year results exceeded expectations, with strong DTC and international growth, record gross margins, and robust cash flow. 2025 guidance calls for 3.5%-4.5% organic revenue growth, margin expansion, and continued DTC focus despite macro and FX headwinds.
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Q3 saw 2% constant currency revenue growth and record 60% gross margin, with Levi's brand up 5% globally. DTC sales rose 12%, while Dockers, China, and Mexico wholesale underperformed. Strategic focus is shifting to Levi's and Beyond Yoga, with Dockers under review for sale.
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Revenue grew 9% in constant currency, led by 11% DTC growth and record 60.5% gross margin. Adjusted EPS of $0.16 exceeded expectations, with strong U.S. and women's performance, and guidance maintained for full-year EPS and revenue growth despite FX headwinds.