LEVI STRAUSS & CO- CLASS A (NYSE:LEVI) Beats Q3 Earnings and Revenue Estimates, Raises 2025 Outlook

LEVI STRAUSS & CO- CLASS A (NYSE:LEVI) delivered a robust third-quarter performance that exceeded analyst expectations on both the top and bottom lines, though the initial market reaction appeared muted as shares dipped in after-hours trading.

Quarterly Performance Versus Expectations

The denim apparel leader reported revenue of $1.54 billion for the quarter ended August 31, 2025, representing a 7% increase compared to the same period last year. This figure surpassed the analyst consensus estimate of $1.52 billion. The company's strategic pivot toward direct-to-consumer channels continued to bear fruit, with organic net revenue growth also coming in at 7%.

On the profitability front, Levi's reported adjusted earnings per share of $0.34, solidly beating the $0.31 per share that analysts had projected. This performance was driven by several key factors:

• Gross margin expanded by 110 basis points to 61.7%, primarily due to favorable channel mix and price increases.
• Direct-to-consumer net revenues grew 11% on a reported basis, now comprising 46% of total net revenues.
• E-commerce net revenues saw a significant 18% increase on a reported basis.

Market Reaction and Strategic Execution

Despite the earnings beat, the stock experienced a decline of approximately 5.3% in after-market trading. This reaction suggests investors may have been anticipating even stronger results or are weighing the company's increased SG&A expenses, which rose 10.5% on an adjusted basis to support growth initiatives.

The company's strategic transformation under CEO Michelle Gass appears to be gaining momentum. Management emphasized their successful shift to a "DTC-first, head-to-toe denim lifestyle retailer" as a key driver of the quarter's performance. The results marked the fourth consecutive quarter of high-single-digit growth, providing evidence that the strategic overhaul is delivering consistent results.

Updated Financial Guidance

Levi's management expressed confidence in their trajectory by raising full-year 2025 guidance, which now aligns favorably with analyst expectations for the coming periods:

• Raised organic net revenue growth to approximately 6% (up from 4.5%-5.5%)
• Increased gross margin expansion outlook to 100 basis points (up from 80 basis points)
• Lifted adjusted diluted EPS guidance to $1.27-$1.32 (up from $1.25-$1.30)

The company's updated revenue growth projection of approximately 3% on a reported basis for the full year positions it well against analyst sales estimates of $6.29 billion for fiscal 2025.

Regional and Channel Performance

The quarter demonstrated balanced growth across geographic segments, with particular strength in Asian markets:

• Americas net revenues increased 6% on a reported basis
• Europe net revenues grew 5% on a reported basis
• Asia net revenues showed the strongest growth at 12% on both reported and organic bases

The direct-to-consumer business outperformed the wholesale segment, which saw a more modest 3% increase in net revenues on a reported basis. This channel mix shift contributed to the overall margin expansion as the company continues to prioritize higher-margin sales through its own retail stores and e-commerce platform.

Capital Returns and Balance Sheet

Levi's maintained a strong financial position while returning significant capital to shareholders:

• Cash and cash equivalents stood at $613 million with total liquidity of approximately $1.5 billion
• Returned $151 million to shareholders through dividends and share repurchases, a 118% increase over the prior year
• Declared a quarterly dividend of $0.14 per share payable in November 2025

The company's ongoing share repurchase program had $440 million remaining under its authorization as of quarter-end, providing additional flexibility for future capital returns.

For investors seeking more detailed analysis of future earnings projections and historical performance, additional earnings estimates and data are available on the Levi Strauss & Co. earnings page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any securities. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions.