The US clothing supplier Levi Strauss & Co. presented surprisingly strong results for the first quarter of the 2025/26 financial year on Tuesday and subsequently raised its annual forecasts. According to its own information, the denim specialist achieved comprehensive growth in all regions and sales channels. The strategic focus on the company’s own retail sector was particularly worthwhile.
In the first quarter, which ended March 1, sales were $1.7 billion. This corresponded to an increase of 14 percent compared to the same period last year. On an organic basis – i.e. adjusted for exchange rate effects and the proportion of discontinued operations – revenue increased by nine percent. The development was spurred on by a double-digit increase in international business.
In Europe, sales grew by 24 percent (organically +10 percent), in Asia by 13 percent and in North and South America by nine percent. In the US market, sales rose by four percent. Beyond Yoga, the group’s activewear brand, performed strongly and recorded a sales increase of 23 percent.
Own retail remains a growth engine
The company’s shift to a direct-to-consumer (DTC) model remains a key growth driver. DTC sales increased 16 percent and accounted for 52 percent of total quarterly sales. Within this channel, e-commerce grew by 21 percent, while like-for-like revenue increased by seven percent. In the wholesale business, sales rose by twelve percent, exceeding expectations.
Michelle Gass, President and CEO of Levi Strauss, stated during the earnings call that the wholesale segment benefited from increased investment from retail partners in the women’s fashion and tops categories. These areas have not yet been fully developed for the brand.
The quarterly profit increases significantly
Net income from continuing operations, which was $140 million in the same quarter last year, rose to $177 million. Diluted earnings per share adjusted for special items reached $0.42, exceeding the original forecast.
During the quarter, the group distributed $214 million to shareholders. This was done through dividends of $54 million and an accelerated share repurchase program of $200 million. The Company has also completed the divestment of its Dockers brand, which is now reported as a discontinued operation.
Chief Financial and Growth Officer Harmit Singh announces his departure
The company also announced that Harmit Singh, executive vice president and chief financial and growth officer, will retire once the succession is determined. Singh will remain as a special advisor during the transition period, a statement said.
Due to the positive start to the year, the group increased its forecasts for the entire 2025/26 financial year. An increase in sales of between 5.5 and 6.5 percent is now expected. On an organic basis, growth of 4.5 to 5.5 percent is forecast. Adjusted diluted earnings per share are now expected to reach $1.42 to $1.48.
“Our strategic transformation leads to higher returns and more profitable growth,” emphasized Singh. The updated forecast takes into account potential macroeconomic pressures and assumes import tariffs from China will remain at 30 percent and from the rest of the world at 20 percent.
As part of its premium strategy, the group says it continues to focus on full-price sales and innovation, with its premium ‘Blue Tab’ line recording a 40 per cent increase in the quarter.
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