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Levi Strauss' Q1 Earnings Beat Estimates, DTC Revenues Up 16% Y/Y
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Key Takeaways
Levi Strauss & Co. beat Q1 EPS and revenue estimates, with both metrics rising year over year.
LEVI's DTC sales rose 16% and e-commerce jumped 21%, driving overall revenue growth.
Levi Strauss raised FY26 revenue and EPS outlook, despite tariff headwinds and a higher tax rate.
Levi Strauss & Co. (LEVI - Free Report) reported impressive first-quarter fiscal 2026 results, wherein earnings per share (EPS) and revenues beat the Zacks Consensus Estimate. Both metrics improved year over year.
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 42 cents, which beat the Zacks Consensus Estimate of 37 cents and rose 10.5% from 38 cents reported in the prior-year period.
Net revenues of $1.74 billion also beat the Zacks Consensus Estimate of $1.65 billion. Also, the metric jumped nearly 14% year over year on a reported basis and 9% on an organic basis. Direct-to-Consumer (DTC) has been a key growth driver, backed by positive comp growth and robust e-commerce performance.
Shares of this Zacks Rank #2 (Buy) company have risen 1.9% in the past three months against the industry’s decline of 14%.
DTC net revenues reflected an increase of 16% on a reported basis and 10% on an organic basis to $911.5 million. Organic DTC growth was backed by a rise of 10% in the United States, 5% in Europe and 16% in Asia. DTC comparable sales grew 7%. E-commerce net revenues were up 21% on a reported basis and 17% on an organic basis. In the fiscal first quarter, DTC accounted for 52% of the overall net revenues. Wholesale net revenues rose 12% on a reported basis to $831 million. The metric rose 8% on an organic basis. Beyond Yoga revenues grew 23% on both a reported and organic basis.
The Zacks Consensus Estimate for DTC and Wholesale channels was pegged at $890 million and $757 million, respectively, for the fiscal first quarter.
Levi Strauss & Co. Price, Consensus and EPS Surprise
In the Americas, revenues increased 9% on a reported basis and 7% on an organic basis. Within the Americas, the US rose 4% on an organic basis, delivering the sixth straight quarter of solid growth.
In Europe, revenues jumped 24% on a reported basis and 10% on an organic basis. All the major markets witnessed growth, thanks to solid performance in the UK.
In Asia, revenues grew 13% on a reported basis and 12% on an organic basis, with double-digit growth across DTC and wholesale.
LEVI’s Margins & Expenses
Gross profit increased 13.7% year over year to $1.1 billion. The gross margin fell 20 basis points (bps) to 61.9% in the fiscal first quarter, mainly owing to tariff headwinds. This was offset by higher pricing and lower promotional activity.
Adjusted SG&A expenses edged up 15.7% to $860.5 million; while, as a percentage of revenues, adjusted SG&A deleveraged 70 bps to 49.4%.
Levi Strauss’ Financial Snapshots
LEVI ended the quarter with cash and cash equivalents of $716.6 million and total liquidity of roughly $1.6 billion. As of March 1, 2026, long-term debt and total shareholders’ equity were $1 billion and $2.2 billion, respectively. Total inventories jumped 4% on a dollar basis. In the first quarter of fiscal 2026, net cash generated from operating activities was $211.5 million and adjusted free cash flow was $152.1 million.
In the fiscal first quarter, the company returned nearly $214 million to shareholders, a 163% increase year over year, including dividends of $54 million. It has launched a $200 million accelerated share repurchase program, taking delivery of and retiring about 8 million shares. The balance shares will be settled at the end of the program. As of March 1, 2026, the company had $240 million remaining under its existing share repurchase authorization, with no expiration date.
LEVI has also announced a cash dividend of 14 cents a share totaling $54 million, payable May 6, 2026, to the holders of record as on April 22, 2026.
What to Expect From LEVI in FY26?
Fiscal 2026, which will end on Nov. 29, 2026, outlook is based upon continuing operations, with the Dockers business reported as discontinued operations. This assumes U.S. tariffs on imports from China being at 30% and the Rest of World at 20%. This view assumes no major worsening of macroeconomic pressures on consumers, inflation, supply-chain bottlenecks, potential tariffs or currency translations.
LEVI’s fiscal 2026 reported net revenue growth is now expected to be 5.5-6.5%, up from 5-6% anticipated earlier. For the fiscal year, it projects organic net revenue growth of around 4.5-5.5% compared with the previous forecast of 4-5%. Gross margin is likely to be flat to slightly up year over year compared with the earlier anticipation of being flat.
Levi Strauss projects adjusted EBIT margin expansion of approximately 12% compared with 11.8-12% guided previously. It expects a tax rate of nearly 23%, two points up from the prior year. LEVI raised its adjusted EPS view to $1.42-$1.48, up from $1.40-$1.46 expected earlier. This reflects an approximate four-cent headwind from the increased tax rate.
The Zacks Consensus Estimate for ANF’s current fiscal-year sales and EPS indicates growth of 4.3% and 8.6%, respectively, from the year-ago figures. ANF delivered a trailing four-quarter earnings surprise of 8.4%, on average.
American Eagle Outfitters, Inc. (AEO - Free Report) operates as a specialty retailer of casual apparel, accessories and footwear for men and women. At present, AEO carries a Zacks Rank of 2.
The Zacks Consensus Estimate for AEO’s current fiscal-year sales and EPS indicates growth of 5.2% and 17.3%, respectively, from the year-ago figures. American Eagle delivered a trailing four-quarter earnings surprise of 37.6%, on average.
Allbirds, Inc. (BIRD - Free Report) , a lifestyle brand, currently has a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of 15.4%, on average.
The Zacks Consensus Estimate for BIRD’s current financial-year EPS indicates growth of 26.9% from the year-ago figure.
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Levi Strauss' Q1 Earnings Beat Estimates, DTC Revenues Up 16% Y/Y
Key Takeaways
Levi Strauss & Co. (LEVI - Free Report) reported impressive first-quarter fiscal 2026 results, wherein earnings per share (EPS) and revenues beat the Zacks Consensus Estimate. Both metrics improved year over year.
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 42 cents, which beat the Zacks Consensus Estimate of 37 cents and rose 10.5% from 38 cents reported in the prior-year period.
Net revenues of $1.74 billion also beat the Zacks Consensus Estimate of $1.65 billion. Also, the metric jumped nearly 14% year over year on a reported basis and 9% on an organic basis. Direct-to-Consumer (DTC) has been a key growth driver, backed by positive comp growth and robust e-commerce performance.
Shares of this Zacks Rank #2 (Buy) company have risen 1.9% in the past three months against the industry’s decline of 14%.
LEVI’s Quarterly Performance: Key Metrics & Insights
DTC net revenues reflected an increase of 16% on a reported basis and 10% on an organic basis to $911.5 million. Organic DTC growth was backed by a rise of 10% in the United States, 5% in Europe and 16% in Asia. DTC comparable sales grew 7%. E-commerce net revenues were up 21% on a reported basis and 17% on an organic basis. In the fiscal first quarter, DTC accounted for 52% of the overall net revenues. Wholesale net revenues rose 12% on a reported basis to $831 million. The metric rose 8% on an organic basis. Beyond Yoga revenues grew 23% on both a reported and organic basis.
The Zacks Consensus Estimate for DTC and Wholesale channels was pegged at $890 million and $757 million, respectively, for the fiscal first quarter.
Levi Strauss & Co. Price, Consensus and EPS Surprise
Levi Strauss & Co. price-consensus-eps-surprise-chart | Levi Strauss & Co. Quote
In the Americas, revenues increased 9% on a reported basis and 7% on an organic basis. Within the Americas, the US rose 4% on an organic basis, delivering the sixth straight quarter of solid growth.
In Europe, revenues jumped 24% on a reported basis and 10% on an organic basis. All the major markets witnessed growth, thanks to solid performance in the UK.
In Asia, revenues grew 13% on a reported basis and 12% on an organic basis, with double-digit growth across DTC and wholesale.
LEVI’s Margins & Expenses
Gross profit increased 13.7% year over year to $1.1 billion. The gross margin fell 20 basis points (bps) to 61.9% in the fiscal first quarter, mainly owing to tariff headwinds. This was offset by higher pricing and lower promotional activity.
Adjusted SG&A expenses edged up 15.7% to $860.5 million; while, as a percentage of revenues, adjusted SG&A deleveraged 70 bps to 49.4%.
Levi Strauss’ Financial Snapshots
LEVI ended the quarter with cash and cash equivalents of $716.6 million and total liquidity of roughly $1.6 billion. As of March 1, 2026, long-term debt and total shareholders’ equity were $1 billion and $2.2 billion, respectively. Total inventories jumped 4% on a dollar basis. In the first quarter of fiscal 2026, net cash generated from operating activities was $211.5 million and adjusted free cash flow was $152.1 million.
In the fiscal first quarter, the company returned nearly $214 million to shareholders, a 163% increase year over year, including dividends of $54 million. It has launched a $200 million accelerated share repurchase program, taking delivery of and retiring about 8 million shares. The balance shares will be settled at the end of the program. As of March 1, 2026, the company had $240 million remaining under its existing share repurchase authorization, with no expiration date.
LEVI has also announced a cash dividend of 14 cents a share totaling $54 million, payable May 6, 2026, to the holders of record as on April 22, 2026.
What to Expect From LEVI in FY26?
Fiscal 2026, which will end on Nov. 29, 2026, outlook is based upon continuing operations, with the Dockers business reported as discontinued operations. This assumes U.S. tariffs on imports from China being at 30% and the Rest of World at 20%. This view assumes no major worsening of macroeconomic pressures on consumers, inflation, supply-chain bottlenecks, potential tariffs or currency translations.
LEVI’s fiscal 2026 reported net revenue growth is now expected to be 5.5-6.5%, up from 5-6% anticipated earlier. For the fiscal year, it projects organic net revenue growth of around 4.5-5.5% compared with the previous forecast of 4-5%. Gross margin is likely to be flat to slightly up year over year compared with the earlier anticipation of being flat.
Levi Strauss projects adjusted EBIT margin expansion of approximately 12% compared with 11.8-12% guided previously. It expects a tax rate of nearly 23%, two points up from the prior year. LEVI raised its adjusted EPS view to $1.42-$1.48, up from $1.40-$1.46 expected earlier. This reflects an approximate four-cent headwind from the increased tax rate.
Eye These Other Solid Picks in Retail
Abercrombie & Fitch Co. (ANF - Free Report) is a specialty retailer of premium, high-quality casual apparel for men, women and kids. At present, Deckers carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for ANF’s current fiscal-year sales and EPS indicates growth of 4.3% and 8.6%, respectively, from the year-ago figures. ANF delivered a trailing four-quarter earnings surprise of 8.4%, on average.
American Eagle Outfitters, Inc. (AEO - Free Report) operates as a specialty retailer of casual apparel, accessories and footwear for men and women. At present, AEO carries a Zacks Rank of 2.
The Zacks Consensus Estimate for AEO’s current fiscal-year sales and EPS indicates growth of 5.2% and 17.3%, respectively, from the year-ago figures. American Eagle delivered a trailing four-quarter earnings surprise of 37.6%, on average.
Allbirds, Inc. (BIRD - Free Report) , a lifestyle brand, currently has a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of 15.4%, on average.
The Zacks Consensus Estimate for BIRD’s current financial-year EPS indicates growth of 26.9% from the year-ago figure.