Levi Strauss on Wednesday increased its profit outlook after receiving tariff refunds, but provided a more cautious revenue outlook.
The denim company lifted its adjusted earnings per share outlook for the full fiscal year to a range of $1.54‑$1.56, up from $1.46‑$1.52, while analysts had projected $1.52‑$1.59, per LSEG.
The firm reduced its full‑year net revenue growth guidance to 7%, the lower end of its prior 7%‑7.5% range.
Levi’s shares were largely unchanged in after‑hours trading after an early rise.
In its fiscal third quarter, the company reported a 4% rise in net revenues in the Americas, while U.S. revenue slipped 1%; operating margin rose to 13.8%, versus 10.8% a year earlier, driven by tariff refunds that added 4.9 percentage points to both operating and gross margins.
Tariff refunds added $0.16 per share to earnings, of which $0.05 was redeployed to support the business, though the company did not disclose how the funds were used.
Below is Levi’s third‑quarter performance relative to Wall Street expectations, according to an LSEG analyst survey:
- Earnings per share: Adjusted EPS was 48 cents, though it remained unclear how this compared with the 36 cents anticipated by Wall Street.
- Revenue: $1.61 billion versus the $1.62 billion expected.
For the three months ended Aug. 30, Levi reported net income of $168.6 million, or $0.43 per share, down from $218.1 million, or $0.55 per share, a year earlier.
Sales increased about 4% to $1.61 billion, up from $1.54 billion a year earlier.
Levi reported a 2% rise in direct‑to‑consumer net revenue for the quarter, while comparable sales remained essentially flat; DTC accounted for 45% of total revenue, and wholesale revenue grew 6%.
“Although our direct‑to‑consumer segment fell short of internal targets, we responded swiftly and are optimistic about the momentum heading into the holiday season, especially in the U.S.,” CEO Michelle Gass said. “Driven by recent acceleration, our DTC business is positioned for mid‑single‑digit growth in the fourth quarter.”
The company noted broad‑based growth across its segments, encompassing its core Levi’s line and its premium blue‑tab collection.