Shares of Levi Strauss & Co (NYSE:LEVI) climbed nearly 10% Wednesday after the company reported a first-quarter earnings beat and slightly raised its full-year guidance.
Analysts broadly praised the results, highlighting a consistent set of strengths that signal continued momentum for the apparel giant.
Both Jefferies and UBS pointed to robust revenue growth driven by wholesale and direct-to-consumer (DTC) channels. U.S. and European wholesale performance accounted for the bulk of the upside, while DTC momentum supported underlying growth.
“Trends remain strong quarter-to-date, and the company has not seen any elasticity from tariff-driven price increases or recent gas price spikes,” Jefferies analysts wrote.
Margin expansion emerged as another shared focus. Both firms highlighted disciplined management of selling, general, and administrative expenses, along with operational improvements such as distribution center efficiencies and supply chain initiatives, as central levers for sustained operating margin growth.
“Focus on SG&A leverage supports continued operating margin expansion ahead and should also help sentiment,” Jefferies analysts wrote.
While Q1 SG&A spending rose due to marketing campaigns and foreign-exchange effects, analysts emphasized that much of it was timing-driven and expected to normalize later in the year. “We continue to expect stronger operating margin expansion over the balance of the year driven by LEVI realizing benefits from its pricing actions and SG&A expenses moderating,” UBS added.
Analysts also cheered Levi’s resilience in the face of macroeconomic uncertainty. Demand remained stable despite tariff-driven price increases and recent spikes in gas prices, and UBS noted potential upside to gross margins if current lower tariff rates persist. Both Jefferies and UBS cited confidence in Levi’s ongoing transformation into a global, multi-channel lifestyle brand, with continued strength in wholesale, effective cost management, and DTC growth supporting optimism for revenue and margin expansion in the coming quarters.
The first-quarter results, analysts say, reinforce the notion that Levi is successfully evolving beyond its North American, men’s denim roots into a broader, more resilient business, with the tools in place to sustain growth even in a volatile macro environment.