US' Levi Strauss raises full-year outlook after strong Q2 performance

Levi Strauss & Co reported strong second-quarter 2025 (Q2 2025) results, driven by robust global direct-to-consumer (DTC) sales and margin expansion. Net revenues rose 6 per cent to $1.4 billion on a reported basis and 9 per cent on an organic basis compared to Q2 2024. The Levi’s brand saw global organic growth of 9 per cent, with the US, Europe, and Beyond Yoga performing particularly well.

The company marked its 13th consecutive quarter of global DTC comparable sales growth, with DTC revenue rising 11 per cent reported and 10 per cent organic. E-commerce revenues climbed 13 per cent, while DTC now accounts for 50 per cent of total net revenues.

Wholesale net revenues increased 3 per cent on a reported basis and 7 per cent on an organic basis.

By region, the Americas posted 5 per cent reported and 9 per cent organic revenue growth, with the US alone growing 7 per cent organically. Europe outpaced other markets with 14 per cent reported and 15 per cent organic growth. Revenues in Asia were flat, the company said in a release.

Levi’s gross margin reached a record 62.6 per cent, up 140 basis points year over year (YoY), largely due to lower product costs and a favourable channel mix.

Operating margin expanded to 7.5 per cent from 1.5 per cent, while adjusted EBIT margin improved by 190 basis points to 8.3 per cent. Adjusted diluted EPS rose 37 per cent YoY to $0.22, compared to $0.16 in Q2 2024.

“We delivered another strong quarter, reflecting broad-based strength across the board—clear evidence that our strategic agenda is gaining traction. We’re entering the second half of 2025 from a position of strength as our ambition to transform into a denim lifestyle brand and best-in-class DTC retailer becomes our reality. Levi’s is a brand that has a rich 172-year heritage and remains a global icon. As we look ahead, Levi’s has an even bolder future with a bigger legacy—and quarter by quarter, we’re building it,” said Michelle Gass, president and CEO of Levi Strauss & Co.

The company raised its full-year guidance despite factoring in higher US tariffs—30 per cent on China imports and 10 per cent on rest-of-world imports. Reported net revenue growth is now expected at 1 to 2 per cent (up from a previous forecast of a decline), and organic growth at 4.5 to 5.5 per cent. Adjusted diluted EPS is projected between $1.25 and $1.30, up from $1.20 to $1.25 previously. Gross margin expansion is now forecast at 80 basis points, slightly reduced due to a 20 basis point tariff impact.

The outlook assumes no major deterioration in macroeconomic conditions, inflation, or additional supply chain disruptions.

“Given our strong H1 and continued momentum across the business—and despite higher tariffs—we are raising our full-year revenue and EPS expectations. The continued inflection of our financial performance is a direct result of our laser focus on the core Levi’s brand and our DTC-first strategy. We are fundamentally becoming a company with a higher growth rate, higher margin profile, stronger cash flows and higher returns on invested capital,” said Harmit Singh, chief financial and growth officer of Levi Strauss & Co.

ALCHEMPro News Desk (HU)