Levi Strauss & Co (NYSE:LEVI) is expected to post a modest first quarter 2026 sales and earnings beat but there is limited potential for a market-moving reaction, according to UBS analysts.
The firm noted that while recent data indicate solid consumer trends, ongoing geopolitical tensions in the Middle East and rising oil prices may lead Levi’s to maintain a cautious stance on its full-year outlook, likely reaffirming fiscal 2026 EPS guidance of $1.40 to $1.46 per share.
“Recent macro volatility could prompt Levi’s to stick with its prior EPS guidance, and our sense is the market already anticipates a similar outcome,” the UBS analysts wrote, adding that the options market is pricing in an approximate 8% move around the earnings release, slightly above the historical average of 6.9%.
UBS highlighted that the key metrics investors will watch include a potential $0.01 to $0.02 first quarter EPS beat, confirmation of the fiscal 2026 guidance, and second quarter EPS guidance in the $0.22 to $0.24 range. The analysts also noted a possibility that management could offer a more constructive outlook on tariffs.
Industry data and UBS Evidence Lab analysis suggest Levi’s maintained momentum in key markets. US direct-to-consumer sales grew roughly 2% year-over-year in the first quarter, reflecting a ~420-basis-point acceleration from the prior quarter. Website traffic rose 8% in the US and 11% across key European sites, while US Google searches for the brand increased 13% year-over-year.
UBS also noted that Levi’s pulled back on promotions during the quarter, supporting pricing stability.
Despite positive operational trends, investor sentiment has softened. Shares are down nearly 13% over the past three months, compared with a roughly 5% decline in the S&P 500, and short interest has climbed to 12.9%.
UBS described sentiment as slightly bearish, citing concerns over potential cost pressures from higher oil prices and the ongoing transition at Levi’s US distribution center.
From a valuation perspective, UBS maintains a Buy rating with a $33 price target, based on roughly 17 times projected fiscal 2028 EPS of $1.95. Shares traded hands at $18 on Friday morning.
The analysts cited strong brand fundamentals, controlled promotional activity, and peer-aligned valuation metrics as supportive factors for their positive outlook.
Levi's will report its fiscal first quarter earnings on April 7.