Levi Strauss & Co (NYSE:LEVI) has reported better-than-expected earnings for the first quarter.
Earnings per share were $0.38, beating estimates of $0.28 and marking a 52% jump from the year-ago quarter.
Revenue increased 3% year-over-year to $1.52 billion, up from $1.48 billion but slightly below estimates of $1.54 billion.
The company also repeated its full-year revenue guidance but noted that its outlook assumes no significant worsening of macroeconomic conditions or the impact of tariffs.
Levi’s continues to expect revenue growth of 3.5% to 4.5% and adjusted earnings per share in the range of $1.20 to $1.25.
“We exceeded revenue and profitability expectations in Q1 marking a strong start to the year, another proof point that our transformation strategy is working,” Levi’s CEO Michelle Gass said in a statement.
“While we recognize that we are operating in an uncertain environment, our global footprint, strong margin structure, and agile supply chain position us to navigate the balance of the year and beyond.”
Better positioned for tariffs: analysts
Analysts at UBS repeated their ‘Buy’ rating on Levi’s, noting that better-than-expected revenue growth and gross margins made it one of the company’s best quarters over the past few years.
“Tariffs are an issue, but we feel Levi’s is better positioned than most because of its global supply chain network, which is more robust compared to what most companies have,” they wrote. “Plus, our view is Levi’s continues to execute well on factors within its control.”
The analysts believe that if the current US tariff policy stays in place, it will weigh on Levi’s earnings starting the third quarter of 2025.
“We anticipate Levi’s will primarily mitigate impacts from tariffs by increasing prices and think this will cause unit volumes/sales to decline,” they wrote. “We also think Levi’s will more aggressively reduce SG&A expenses in response to weakening revenue growth rates.”
Analysts have a $20 price target on the stock, noting this puts its valuation in line with peers in terms of price-to-earnings ratio, price-to-sales ratio and free cash flow yield.
“We believe Levi’s ongoing transformation into a global, multi-channel, lifestyle brand for both men and women from what traditionally was a North America, wholesale, men’s, denim business should continue to fuel share gains over the long-term,” analysts wrote.
Shares of Levi’s were up 12.7% at about $15 before Tuesday’s opening bell in New York but retreated near the flatline in early trading.