Levi Strauss & Co. Reports Third-Quarter Results

Reported Net Revenues up 4%; Organic Net Revenues up 5%

Operating Margin of 13.8%; Adj EBIT Margin of 15.5%

Continuing Operations Diluted EPS of $0.43; Adj Diluted EPS of $0.48

Raises Full Year 2026 Margin and EPS Outlook

SAN FRANCISCO--(BUSINESS WIRE)--Levi Strauss & Co. (NYSE: LEVI) today announced financial results for the third quarter ended August 30, 2026.

“Our third-quarter performance highlighted the power of our diversified portfolio and reinforced our confidence that we have the right strategies in place,” said Michelle Gass, President and CEO of Levi Strauss & Co. “We saw strong growth in our international and wholesale businesses, and continued momentum across our lifestyle categories. While our direct-to-consumer business fell short of our internal expectations, we moved quickly to address the shortfall and are encouraged by the strength we are seeing heading into the holiday season, including in the U.S. Based on the acceleration in recent trends, our DTC business is on track to deliver mid-single-digit growth in the fourth quarter.”

“We delivered another quarter of mid-single-digit revenue growth while navigating a dynamic operating environment,” said Harmit Singh, Chief Financial and Growth Officer of Levi Strauss & Co. “We made the decision to redeploy a majority of our tariff refund benefit back into the business during Q3 and Q4 to support future growth. Reflecting confidence in our outlook, we are raising our full-year profit guidance and plan to initiate a $100 million accelerated share repurchase program.”

Financial Highlights for the Third Quarter

• Net Revenues of $1.6 billion increased 4% on a reported basis and 5% on an organic basis versus Q3 2025.
  • In the Americas, net revenues increased 4% on a reported basis and 2% on an organic basis. Within the Americas, the U.S. decreased 1% on a reported basis.
  • In Europe, net revenues increased 4% on a reported basis and 5% on an organic basis.
  • In Asia, net revenues increased 5% on a reported basis and 10% on an organic basis.
  • Beyond Yoga® increased 9% on a reported and organic basis.
• DTC (Direct-to-Consumer) net revenues increased 2% on a reported and organic basis. DTC growth on a reported basis reflected a 2% increase in the Americas, a 1% decrease in the U.S., a 2% decrease in Europe and an 8% increase in Asia. DTC growth on an organic basis was flat in the Americas and reflected a 1% decrease in Europe and an 11% increase in Asia. Net revenues from e-commerce grew 10% on a reported and organic basis. DTC comparable sales growth was flat. DTC comprised 45% of total net revenues in the third quarter.
• Wholesale net revenues increased 6% on a reported and organic basis, driven by growth in all segments, with particularly strong performance in Europe and Asia.

• Operating margin was 13.8% in Q3 2026 compared to 10.8% in Q3 2025. Adjusted EBIT margin was 15.5% in Q3 2026 compared to 11.8% in Q3 2025.
  • The impact of tariff refunds contributed 490 basis points⁽¹⁾ of margin expansion, of which approximately 160 basis points⁽²⁾ were redeployed to support the business.
  • The tariff refund benefit, net of redeployment, was 330 basis points.
• Gross margin expanded 450 basis points to 66.2% compared to 61.7% in Q3 2025.
  • The impact of tariff refunds contributed 490 basis points⁽¹⁾ of gross margin expansion, of which approximately 120 basis points⁽²⁾ were redeployed to support the business.
  • The tariff refund benefit, net of redeployment, was 370 basis points.
• Selling, general and administrative expenses (SG&A) were $836 million compared to $776 million in Q3 2025. Adjusted SG&A was up 6.2% to $817 million compared to $769 million last year.
  • Includes approximately 40 basis points⁽²⁾ of costs redeployed to support the business.
  • The remaining increase was driven primarily by selling and distribution expenses.
• Interest and other income (expense), net, which includes foreign exchange gains and losses, were expenses of $2 million⁽¹⁾ in Q3 2026 and expenses of $11 million in the aggregate in Q3 2025.
• The effective income tax rate was 23.4%, compared to 21.9% in Q3 2025.
• Net income from continuing operations was $169 million compared to $122 million in Q3 2025. Adjusted net income was $189 million compared to $136 million in Q3 2025.
• Diluted earnings per share from continuing operations was $0.43 compared to $0.31 in Q3 2025. Adjusted diluted earnings per share was $0.48 compared to $0.34 in Q3 2025.
  • The impact of tariff refunds contributed $0.16⁽¹⁾ of EPS benefit, of which approximately $0.05⁽²⁾ was redeployed to support the business.
  • The tariff refund benefit, net of redeployment, was $0.11.

Highlights include:

Additional information regarding DTC Comparable sales growth, a key metric, is provided at the end of this press release.

Additional information regarding Adjusted SG&A, Adjusted EBIT, Adjusted EBIT margin, Adjusted net income, Adjusted diluted earnings per share, Adjusted free cash flow, as well as amounts presented on an organic net revenues basis and constant currency basis, all of which are non-GAAP financial measures, is provided at the end of this press release.

Balance Sheet Review as of August 30, 2026

• Cash and cash equivalents were $641 million, while total liquidity was approximately $1.5 billion.
• Total inventories decreased 3% on a dollar basis compared to Q3 2025.

Shareholder Returns

In the third quarter, the company returned $61.6 million in the form of dividends to shareholders, an 11% increase over prior year, representing a dividend of $0.16 per share. The $200 million accelerated share repurchase (ASR) program launched in the first quarter of 2026 settled in the third quarter and the company took delivery of and retired approximately 1.6 million shares for a total of 9.4 million shares over the entirety of the ASR program.

As of August 30, 2026, the company had $240 million remaining under its current share repurchase authorization, which has no expiration date. In line with the company’s capital allocation strategy, the company intends to enter into an ASR agreement to repurchase $100 million of its Class A common stock.

The company declared a dividend of $0.16 per share, a 14% increase over prior year, totaling approximately $61 million, payable in cash on November 4, 2026 to the holders of record of Class A common stock and Class B common stock at the close of business on October 21, 2026.

Fiscal 2026 Guidance

Guidance for 2026 is based on continuing operations, reflecting the Dockers^® business being reported in discontinued operations. Guidance includes the impact of IEEPA tariff refunds of which the company is redeploying approximately $60 million for the full year, including approximately $35 million for the fourth quarter. This assumes current tariff rates remain in effect for the remainder of the year.

The following guidance is provided for the year ending November 29, 2026:

This outlook also assumes no significant worsening of macro-economic pressures on the consumer, inflationary pressures, supply chain disruptions, potential tariffs or currency fluctuations. A reconciliation of non-GAAP forward looking information to the corresponding GAAP measures cannot be provided without unreasonable efforts due to the challenge in quantifying various items including but not limited to, the effects of foreign currency fluctuations, taxes, potential tariffs and refunds, and any future restructuring, restructuring-related, severance and other charges.

Investor Conference Call

To access the conference call, please pre-register on https://register-conf.media-server.com/register/BI30f6874931434e4392e349b637a9cb4c and you will receive confirmation with dial-in details. A live webcast of the event can be accessed on https://edge.media-server.com/mmc/p/hoe63w58.

A replay of the webcast will be available on http://investors.levistrauss.com starting approximately two hours after the event and archived on the site for one quarter.

About Levi Strauss & Co.

Levi Strauss & Co. (LS&Co.) is one of the world's largest brand-name apparel companies and a global leader in jeanswear. The company designs and markets jeans, casual wear and related accessories for men, women and children under the Levi's®, Levi Strauss Signature™, and Beyond Yoga® brands. Its products are sold in approximately 120 countries worldwide through a combination of chain retailers, department stores, online sites, and a global footprint of approximately 3,300 retail stores and shop-in-shops. Levi Strauss & Co.'s reported 2025 net revenues were $6.3 billion. For more information, go to http://levistrauss.com, and for financial news and announcements go to http://investors.levistrauss.com.

Forward-Looking Statements

This press release and related conference call contains, in addition to historical information, forward-looking statements, including statements related to: future financial results, including the company’s expectations for the full fiscal year 2026 net revenues (both reported and on an organic net revenues basis), gross margin, adjusted EBIT margins, adjusted SG&A, adjusted diluted earnings per share and effective tax rate; business and market outlook; consumer preferences; progress against strategic priorities; the ongoing restructuring of our operations and our ability to achieve any anticipated cost savings associated with such restructuring; trajectory of direct-to-consumer business; macroeconomic conditions, including impacts of and uncertainties around U.S. tariffs and potential refunds and any additional retaliatory measures by impacted exporting countries; impacts of foreign currency exchange; capital expenditures; pricing initiatives; inventory growth; new store openings; investments in high growth initiatives; future dividend payments and share repurchases; and efforts to diversify product categories and distribution channels, and the related revenue projections. The company has based these forward-looking statements on its current reasonable assumptions, expectations and projections about future events. Words such as, but not limited to, “believe,” “will,” “may,” “so we can,” “when,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “could” and similar expressions are used to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements are necessary estimates reflecting the best judgment of our senior management and involve a number of risks and uncertainties, some of which are beyond our control, that could cause actual results to differ materially from those suggested by the forward-looking statements. Investors should consider the information contained in the company's filings with the U.S. Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for fiscal 2025, especially in the “Management's Discussion and Analysis of Financial Condition and Results of Operations”, “Summary of Risk Factors” and “Risk Factors” sections, and its Quarterly Report on Form 10-Q for the quarter ended August 30, 2026, especially in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, section. Other unknown or unpredictable factors also could have material adverse effects on future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release and related conference call may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated or, if no date is stated, as of the date of this press release and related conference call. The company is not under any obligation and does not intend to update or revise any of the forward-looking statements contained in this press release and related conference call to reflect circumstances existing after the date of this press release and related conference call or to reflect the occurrence of future events, even if such circumstances or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized.

Key Metrics

DTC Comparable sales growth is used by management to evaluate the performance of our existing Levi’s^® brand company owned and operated mainline and outlet store base and owned digital channels by measuring year‑over‑year changes in net revenues for stores open for at least 12 full fiscal months, excluding the effects of changes in our store portfolio and other events that materially affect comparability such as significant relocations, or expansions and remodels. In fiscal years with 53 weeks, the impact of the additional week is excluded, and prior‑year periods are adjusted as necessary to align comparable weeks. DTC Comparable sales growth is presented on a constant currency basis and is intended as a supplemental operating metric, which may not be comparable to similarly titled measures used by other companies.

Non-GAAP Financial Measures

The company reports its financial results in accordance with generally accepted accounting principles in the United States (GAAP) and the rules of the SEC. To supplement its financial statements prepared and presented in accordance with GAAP, the company uses certain non-GAAP financial measures, such as Adjusted SG&A, Adjusted SG&A margin, Adjusted EBIT (both reported and on a constant-currency basis), Adjusted EBIT margin (both reported and on a constant-currency basis), Adjusted EBITDA, Adjusted net income (both reported and on a constant-currency basis), Adjusted diluted earnings per share (both reported and on a constant-currency basis), organic net revenues, Adjusted free cash flow, and return on invested capital to provide investors with additional useful information about its financial performance, to enhance the overall understanding of its past performance and future prospects and to allow for greater transparency with respect to important metrics used by management for financial and operating decision-making. The company presents these non-GAAP financial measures to assist investors in seeing its financial performance from management's view and because it believes they provide an additional tool for investors to use in computing the company's core financial performance over multiple periods with other companies in its industry. The tables found below present Adjusted SG&A, Adjusted SG&A margin, Adjusted EBIT (both reported and on a constant-currency basis), Adjusted EBIT margin (both reported and on a constant-currency basis), Adjusted EBITDA, Adjusted net income (both reported and on a constant-currency basis), Adjusted diluted earnings per share (both reported and on a constant-currency basis), organic net revenues, Adjusted free cash flow, and return on invested capital and corresponding reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP. Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. Certain items that may be excluded or included in non-GAAP financial measures may be significant items that could impact the company’s financial position, results of operations and cash flows and should therefore be considered in assessing the company’s actual financial condition and performance. Non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgment by management in determining how they are formulated. Some specific limitations include but are not limited to, the fact that such non-GAAP financial measures: (a) do not reflect cash outlays for capital expenditures, contractual commitments or liabilities including pension obligations, post-retirement health benefit obligations and income tax liabilities; (b) do not reflect changes in, or cash requirements for, working capital requirements; and (c) do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on indebtedness. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, the company's financial results prepared in accordance with GAAP. The company urges investors to review the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures included in this press release, and not to rely on any single financial measure to evaluate its business. See “RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES” below for reconciliation to the most comparable GAAP financial measures. A reconciliation of non-GAAP forward-looking information to the corresponding GAAP measures cannot be provided without unreasonable efforts due to the challenge in quantifying various items including but not limited to, the effects of foreign currency fluctuations, taxes, and any future restructuring, restructuring-related, severance and other charges.

Organic Net Revenues and Constant-Currency

The company reports net revenues in accordance with GAAP, as well as on an organic net revenues basis in order to facilitate period-to-period comparisons of our revenues which excludes the impact of fluctuating foreign currency exchange rates from the change in reported net revenues, net revenues derived from business acquisitions, divestitures or wind downs impacting the comparable reporting date and the estimated impact of any 53^rd week. The company reports certain operating results in accordance with GAAP, as well as on a constant-currency basis in order to facilitate period-to-period comparisons of its results without regard to the impact of fluctuating foreign currency exchange rates. These measures exclude the results of our Dockers® business, which is classified as discontinued operations.

The term foreign currency exchange rates refers to the exchange rates used to translate the company's operating results for all countries where the functional currency is not the U.S. Dollar into U.S. Dollars. Because the company is a global company, foreign currency exchange rates used for translation may have a significant effect on its reported results. In general, the company's financial results are affected positively by a weaker U.S. Dollar and are affected negatively by a stronger U.S. Dollar as compared to the foreign currencies in which it conducts its business. References to operating results on a constant-currency basis mean operating results without the impact of foreign currency translation fluctuations.

The company calculates constant-currency amounts by translating local currency amounts in the prior-year period at actual foreign currency exchange rates for the current period. Constant-currency results do not eliminate the transaction currency impact, which primarily includes the realized and unrealized gains and losses recognized from the measurement and remeasurement of purchases and sales of products in a currency other than the functional currency and of forward foreign exchange contracts.

The company believes disclosure of organic net revenues and Adjusted EBIT constant-currency, Adjusted EBIT Margin constant-currency and Adjusted Net Income constant-currency results is helpful to investors because it facilitates period-to-period comparisons of its results by increasing the transparency of the underlying performance by excluding the impact of fluctuating foreign currency exchange rates. However, organic net revenues and constant-currency results are non-GAAP financial measures and are not meant to be considered in isolation or as a substitute for comparable measures prepared in accordance with GAAP. Organic net revenues and constant-currency results have no standardized meaning prescribed by GAAP, are not prepared under any comprehensive set of accounting rules or principles and should be read in conjunction with the company's consolidated financial statements prepared in accordance with GAAP. Organic net revenues and constant-currency results have limitations in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies.

Investor Contact:
Aida Orphan
Levi Strauss & Co.
(415) 501-6194
Investor-Relations@levi.com

Media Contact:
Mark Cazares
Levi Strauss & Co.
(415) 501-7777
NewsMediaRequests@levi.com