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What were the key takeaways from Levi Strauss’s earnings call?

- **Revenue beat**: Q3 +7% (vs. +3% U.S., +12% Asia). Women's +9%, tops +9%, e-commerce +16%.
- **Margin strength**: Gross margin 61.7% (+110bps), EBIT 11.8%, EPS $0.34 (both ahead of guide).
- **Guidance raise**: Full year organic +6%, EPS $1.27-$1.32 (+$0.02). Q4 revenue +1% (2-year +9%).
- **Tariff mitigation**: 2025 impact 20bps, 2026 actions include pricing, FX, and diversification.
- **Share buyback**: $283M returned YTD, including $120M ASR.
- **2026 vision**: 15% EBIT margin with gross margin expansion, SG&A leverage, and marketing reinvestment.

**【CEO Summary Section】**
- Delivered 4th consecutive quarter of high single-digit organic revenue growth (9% DTC, 5% wholesale). 
- U.S. grew 3%, International up 9% (Asia +12%), with women's +9%, tops +9%, and shorts strong across genders.
- DTC-first strategy driving 40% U.S. DTC penetration, e-commerce +16% to 15% of total business.
- Holiday ready with expanded denim lifestyle assortment, Beyoncé campaign extension, and Shaboozey men's campaign.
- 2026 outlook: Mid-single-digit growth, 15% EBIT margin target with gross margin expansion and SG&A leverage.

**【CFO Financial Commentary】**
- Q3 net revenue +7% vs. +3% U.S., +12% Asia. Gross margin 61.7% (+110bps vs. prior year), driven by DTC mix, pricing, and FX.
- Adjusted EBIT margin 11.8%, EPS $0.34 (both ahead of expectations). Full year guidance raised: Organic +6%, EPS $1.27-$1.32 (+$0.02).
- Q4 guide: Revenue +1% (2-year stack +9%), gross margin -100bps due to tariffs, EPS $0.36-$0.38.
- Tariffs impact 2025 gross margin by 20bps, 2026 actions include pricing, promotion optimization, and supply chain diversification.
- Returned $283M to shareholders YTD, including $120M ASR.

**【Q&A Highlights】**
- **Europe momentum**: Q3 +3% (UK +mid-teens), prebooks +mid-single digits. No demand pullback despite macro concerns.
- **Tariff mitigation**: 2025 impact 70bps (mitigated to 20bps), 2026 actions include pricing, FX, and diversification.
- **Inventory**: +12% vs. prior year, 70% holiday product in U.S. Full-price selling up, promotions down.
- **Wholesale health**: U.S. +2%, global +5%. Growth driven by existing partners responding to newness, not new doors.
- **SKU rationalization**: -15% SKUs vs. prior year, 40% global common SKUs, +20% SKU productivity.
- **2026 margin path**: Gross margin expansion (structural mix, pricing), SG&A leverage, modest marketing reinvestment.

Levi Strauss & Co. (LEVI) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

LEVI

LEVI fundamentals

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