Levi’s Tops Q1 Estimates, Stays Strong on Tariff Risks with Bullish FY25 Outlook

Levi Strauss & Co. delivered better-than-feared fiscal Q1 results Monday afternoon, offering a dose of reassurance to investors seeking signs of durability amid an increasingly chaotic macro backdrop. The jeans maker topped earnings expectations, reaffirmed full-year guidance, and provided comfort around its tariff exposure—key themes for a retail sector battered by global trade volatility. The stock, which had fallen from $16 to $13 last week during the broader market plunge, clawed back ground in Monday’s regular session and extended gains in after-hours trading to $14.75, setting up a test of significant resistance at the $15.80 level.

For its fiscal first quarter, Levi’s reported adjusted earnings per share of $0.38, handily beating consensus estimates of $0.28. Revenue came in at $1.53 billion, just a tick below the $1.54 billion consensus, but strong when considering macroeconomic headwinds and the reclassification of Dockers as a discontinued operation. Adjusted net income totaled $150 million, well above the $112.8 million Wall Street expected. Gross margin was particularly impressive at 62.1%, up 330 basis points from the prior year, helped by favorable product mix and lower input costs.

Key operating metrics continued to improve, reflecting underlying strength in the brand. Operating margin expanded to 12.5%, while adjusted EBIT margin jumped 400 basis points to 13.4%. Direct-to-consumer revenue grew 9%, with notable strength in e-commerce and international markets, while wholesale revenue declined 3%. Inventory was well-positioned going into spring, and management confirmed most seasonal goods are already in-country—critical insulation as new tariff schedules approach.

The most important takeaway from the report, however, was Levi’s commentary on the tariff environment. Unlike many peers scrambling to reroute supply chains or eat margin hits, Levi Strauss struck a confident tone. “We anticipate minimal impact to our Q2 margin outlook from recent tariffs,” said CFO Harmit Singh. He emphasized the company's diversified sourcing footprint across 28 countries and noted that Levi’s is actively scenario-planning for various macro outcomes, including price adjustments and sourcing realignment. This relative resilience stands in contrast to names like Apple or Tesla, which have flagged material exposure to the evolving trade war.

Guidance was reaffirmed across the board. For FY25, Levi’s continues to expect adjusted EPS of $1.20 to $1.25, bracketing consensus at $1.25. Organic revenue is expected to grow 3.5% to 4.5%, while reported revenue will contract 1% to 2% due to the Dockers reclassification. Gross margin is forecast to expand 100 basis points to roughly 61.6%, and EBIT margin is projected to rise to 11.4%-11.6%, reflecting continued operating leverage. Notably, none of this guidance includes potential tariff impacts, and management cautioned that assumptions could shift if macroeconomic conditions deteriorate materially.

CEO Michelle Gass struck an optimistic tone on the call, crediting the company’s transformation strategy and emphasizing Levi’s brand strength globally. “The Levi’s brand is stronger than ever,” she said, highlighting product innovation and cultural relevance as levers for continued growth. CFO Singh added that March trends were solid, giving the company “momentum heading into Q2.”

Investors responded positively, with shares rising 3.1% in after-hours trading following a volatile but constructive session. Technical traders will be watching the $15.80 level closely, which served as key support before the recent breakdown. A decisive move through that area would likely attract fresh momentum buying, especially if broader markets continue their rebound from oversold conditions.

With the retail sector under scrutiny as tariff shocks ripple through global supply chains, Levi Strauss offered a rare dose of clarity. While uncertainty remains high, the company’s diversified sourcing, disciplined execution, and strong margin profile put it in a better position than many to weather the storm. As investors sort through the winners and losers of the trade war fallout, Levi’s may increasingly find itself on the right side of that ledger.