Levi Strauss & Co (NYSE:LEVI) reported second quarter results that topped Wall Street expectations, driven by higher revenue and earnings, while raising its full-year revenue and earnings guidance and increasing its quarterly dividend.
The apparel company reported adjusted earnings of $0.28 per diluted share for the quarter ended May 31, ahead of analysts' expectations of $0.24.
Revenue rose 8% year over year to $1.56 billion, exceeding the consensus estimate of $1.52 billion. On an organic basis, net revenue increased 6%.
Operating margin improved to 7.8% from the prior year, while adjusted EBIT margin expanded 70 basis points to 9%. Diluted earnings per share from continuing operations increased 20% year over year to $0.24, and adjusted diluted EPS rose 27% to $0.28.
Levi’s CEO Michelle Gass said the brand continued to gain traction with consumers as the company executed its strategy to expand its direct-to-consumer business and broader lifestyle offerings.
“While we are pleased with the progress, we are still in the early stages of our long-term growth journey, with more ways to win than ever before,” Gass said.
During the quarter, direct-to-consumer revenue increased 11% on a reported basis, with e-commerce sales rising 19%. DTC represented 51% of total net revenue in the quarter. Wholesale revenue increased 5%.
By region, revenue increased 9% in the Americas, 4% in Europe on a reported basis, and 10% in Asia. Beyond Yoga revenue grew 16%.
Following its first-half performance, Levi Strauss raised its fiscal 2026 outlook. The company now expects reported net revenue growth of 7% to 7.5%, up from its previous forecast of 5.5% to 6.5%, and organic revenue growth of 5.5% to 6%, compared with prior guidance of 4.5% to 5.5%.
The company also increased its adjusted diluted EPS forecast to a range of $1.46 to $1.52 from its previous outlook of $1.42 to $1.48.
It now expects gross margin to improve by up to 10 basis points year over year while maintaining its expectation for an adjusted EBIT margin of approximately 12%.
Levi Strauss said its guidance assumes US tariffs on imports from China remain at 30% and tariffs on imports from the rest of the world remain at 20%.
Shares of Levi Strauss were up 1% following the report.