Levi Strauss & Co. (LEVI Quick QuoteLEVI - Free Report) reported impressive third-quarter fiscal 2025 results, wherein earnings per share (EPS) and revenues beat the Zacks Consensus Estimate. Both metrics improved year over year.

Direct-to-Consumer (DTC) has been a key growth driver, backed by positive comp growth and robust e-commerce performance. LEVI posted positive global comps for the 14th straight time in the reported quarter. Its innovation pipeline is also robust.

Levi Strauss, one of the world's largest brand-name apparel companies and a global leader in jeans wear in the Americas, Europe and Asia, posted quarterly adjusted EPS of 34 cents, which beat the Zacks Consensus Estimate of 31 cents and rose nearly 3% from 33 cents reported in the prior-year period. 

Net revenues of $1.54 billion also beat the Zacks Consensus Estimate of $1.50 billion. Also, the metric jumped nearly 7% year over year on a reported basis and 6.9% on an organic basis.

Shares of this Zacks Rank #2 (Buy) company have risen 63.1% in the past three months compared with the industry’s growth of 25.2%.

LEVI’s Quarterly Performance: Key Metrics & Insights

DTC net revenues reflected an increase of 11.3% on a reported basis and 8.8% on an organic basis to $711.2 million. Organic DTC growth was backed by a rise of 7% in the United States, 4% in Europe and 14% in Asia. E-commerce net revenues were up 18% on a reported basis and 16% on an organic basis. In the fiscal third quarter, DTC accounted for 46% of the overall net revenues.

Wholesale net revenues rose 3.5% on a reported basis to $832.2 million. The metric rose 5.3% on an organic basis. Beyond Yoga revenues grew 2% on both a reported and organic basis.

The Zacks Consensus Estimate for DTC and Wholesale channels was pegged at $669 million and $831 million, respectively, for the fiscal third quarter.

In the Americas, revenues increased 6% on a reported basis and 7% on an organic basis. Within the Americas, the US rose 3% on an organic basis, delivering the fifth straight quarter of solid growth. U.S. wholesale net revenues were up despite the headwinds related to the transition of its U.S. distribution centers. Backed by broad-based strength in the region, LatAm recorded various consecutive quarters of double-digit growth, including Q3, which recorded 23% growth.

In Europe, revenues jumped 5% on a reported basis and 3% on an organic basis. All the major markets witnessed growth, thanks to solid performance in the UK.

In Asia, revenues grew 12% both on a reported basis and an organic basis, with double-digit growth across DTC and wholesale.

LEVI’s Margins & Expenses

Gross profit increased 8.9% year over year to $951.6 million. The gross margin expanded 110 basis points (bps) to 61.7% in the fiscal third quarter, more than offsetting 80 bps of tariff headwinds. This growth was primarily buoyed by pricing actions, a favorable structural business mix and positive impacts of foreign exchange.

Adjusted SG&A expenses edged up 10.5% to $769.3 million; while, as a percentage of revenues, adjusted SG&A deleveraged 160 bps to 49.8%.

Levi Strauss’ Other Financial Snapshots

LEVI ended the quarter with cash and cash equivalents of $612.8 million and total liquidity of $1.5 billion. As of Aug. 31, 2025, long-term debt and total shareholders’ equity were $1 billion and $2.2 billion, respectively. Total inventories jumped 12% on a dollar basis. In the nine months of fiscal 2025, net cash generated from operating activities was $262.8 million and adjusted free cash flow was $92.5 million.

In the fiscal third quarter, the company returned nearly $151 million to shareholders, a 118% increase year over year, including dividends of $55 million. It has launched a $120 million accelerated share repurchase program, taking delivery of and retiring about 5 million shares. The balance shares will be settled at the end of the program. As of Aug. 31, 2025, the company had $440 million remaining under its existing share repurchase authorization, with no expiration date.

For Q4, LEVI has announced a cash dividend of 14 cents a share totaling $55 million, payable Nov. 4, 2025, to the holders of record as on Oct. 20, 2025.

What to Expect From LEVI in FY25?

The 2025 outlook is based on continuing operations, with the Dockers business as discontinued operations. This assumes U.S. tariffs on imports from China at 30% and Rest-of-World at 20% for the rest of the year. Looking at 2026, the company continues to take actions to offset the tariffs. Such mitigation efforts include promotion optimization, pricing actions, vendor negotiation and supply-chain diversification.

For the fiscal fourth quarter, management expects organic net revenue growth to be approximately 1%. On a two-year stack, this equates to 9% growth organically. Reported net revenues are likely to decline approximately 3% owing to the non-comparable items, including the 53rd week, Denizen and footwear, which are not included in the revenue base. Gross margin is forecast to contract about 100 bps, due to tariffs and the absence of the 53rd week. Adjusted EBIT margin will come in the band of 12.4-12.6%. EPS is envisioned in the range of 36-38 cents.

LEVI’s fiscal 2025 reported net revenue growth is now expected to be about 3%, up from 1-2% anticipated earlier. For the fiscal year, it projects organic net revenue growth of around 6% compared with the previous forecast of 4.5-5.5%. 

The gross margin is likely to be up 100 bps and the adjusted EBIT margin is still likely to be in the band of 11.4-11.6%. Adjusted EPS is envisioned to be $1.27-$1.32, up from $1.25-$1.30. The tax rate is forecast to be 23% for fiscal 2025.

Eye These Solid Picks in Retail Too

Urban Outfitters (URBN Quick QuoteURBN - Free Report) , a lifestyle specialty retailer that offers fashion apparel and accessories, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Urban Outfitters’ current financial-year sales indicates growth of 5.5% from the year-ago figure. URBN delivered an average earnings surprise of 24.8% in the last four quarters.

Genesco Inc. (GCO Quick QuoteGCO - Free Report) operates as a retailer and wholesaler of footwear, apparel and accessories, sporting a Zacks Rank of 1 at present. GCO delivered a trailing four-quarter earnings surprise of 32.4%, on average.

The Zacks Consensus Estimate for Genesco’s current fiscal-year EPS and sales indicates growth of 66% and 1.7%, respectively, from the year-ago period’s reported figures.

Allbirds, Inc. (BIRD Quick QuoteBIRD - Free Report) , a lifestyle brand, currently has a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of 20.7%, on average.

The Zacks Consensus Estimate for BIRD’s current financial-year EPS indicates growth of 18.3% from the year-ago figure.