Levi Strauss 2025 Q2 Earnings Beats Expectations with Net Income Up 272.2%

Levi Strauss (LEVI) reported its fiscal 2025 Q2 earnings on Jul 10th, 2025. The company exceeded expectations, reporting revenue of $1.45 billion against a forecast of $1.37 billion. Adjusted earnings per share (EPS) stood at 22 cents, surpassing the anticipated 13 cents. Levi Strauss raised its full-year guidance, projecting revenue growth between 1% and 2% and adjusted EPS of $1.25 to $1.30, outperforming prior estimates. This strong performance reflects the company's strategic focus and resilience amidst challenging market conditions.

Revenue

Levi Strauss achieved a total revenue of $1.45 billion in 2025 Q2, marking a 6.4% increase from the previous year's $1.36 billion. The growth was driven by its wholesale division, generating $729.90 million, while the direct-to-consumer segment contributed $716.10 million. These figures illustrate robust expansion across both business channels.

Earnings/Net Income

Levi Strauss's EPS surged by 240.0% to $0.17 in 2025 Q2, up from $0.05 in the same quarter of 2024, signaling continued earnings growth. The company's profitability was further underscored by a significant rise in net income, which climbed to $67 million, representing a 272.2% increase from the $18 million reported in 2024 Q2. The EPS performance suggests strong financial health and effective strategic execution.

Price Action

The stock price of Levi Strauss has edged up 0.59% during the latest trading day, 2.60% over the most recent full trading week, and has jumped 13.07% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing Levi Strauss (LEVI) shares on the earnings release date and selling them 30 days later yielded moderate returns but underperformed the broader market. The strategy's compound annual growth rate (CAGR) was 3.80%, significantly lagging behind the benchmark by 55.39%. With a maximum drawdown of -42.16% and a Sharpe ratio of 0.13, the strategy's risk-return profile proved challenging, emphasizing the necessity of effective risk management in such volatile market conditions. Investors should be cautious and considerate of potential market fluctuations when adopting this approach.

CEO Commentary

Michelle D. Gass, CEO, expressed confidence in the business performance, highlighting a standout quarter with a 9% high single-digit organic net revenue growth and strong profitability across channels. She noted the company’s strategic transformation towards a direct-to-consumer (DTC) model, achieving over half of the business through owned channels, and emphasized the successful evolution into a full lifestyle brand, particularly in women's and tops. Gass acknowledged challenges in the global operating environment but maintained an optimistic outlook, stating, "We are entering the second half of 2025 from a position of strength with the right initiatives in place to sustain our momentum."

Guidance

For the full year, Levi Strauss has raised its organic net revenue growth expectations to 4.5% to 5.5%. The reported net revenue growth is now projected at 1% to 2%, factoring in a 50 basis point drag from foreign exchange. The full-year gross margin is expected to expand by 80 basis points year-over-year, reaching a new record. Adjusted diluted EPS guidance has been increased to between $1.25 to $1.30, accounting for a net tariff headwind of $0.02 to $0.03, with Q3 organic net revenue growth anticipated at 4% to 5%.

Additional News

In recent developments, Levi Strauss has strategically realigned its operations by selling its Dockers brand to Authentic Brands Group, as part of its ongoing focus on enhancing the core Levi's® brand. CEO Michelle Gass has been spearheading this transformation, emphasizing a shift towards direct-to-consumer sales, which has proven to be more profitable than traditional wholesale channels. Additionally, the company has been expanding its product offerings beyond denim, with new collaborations such as the limited-edition Beyonce x Levi’s T-shirts and a partnership with Nike, signaling its commitment to innovation and broadening its appeal to diverse consumer segments.