Levi Strauss & Co. (NYSE: LEVI) reported financial results for its first quarter ended March 1, 2026, with revenue and earnings exceeding company guidance and prompting an upward revision to its full-year outlook.
The apparel company posted net revenues of $1.74 billion, representing a 14% increase on a reported basis and 9% growth on an organic basis compared with the same period a year earlier. Diluted earnings per share from continuing operations rose to $0.45, up from $0.35 in the prior-year quarter, while adjusted diluted EPS was $0.42.
The results reflect growth across geographic regions and distribution channels, as the company continues shifting toward a direct-to-consumer (DTC) model. Levi Strauss also raised its fiscal 2026 guidance for revenue, margins, and earnings, citing early-year performance and current trends.
#Revenue Growth Across Regions and Channels
Revenue gains were reported across all major regions. In the Americas, sales increased 9% year over year, while Europe recorded a 24% rise on a reported basis. Asia posted a 13% increase. On an organic basis, growth was more moderate but remained positive across all regions.
Direct-to-consumer sales continued to be a central driver of growth. DTC revenues rose 16% on a reported basis and accounted for 52% of total net revenues during the quarter. E-commerce sales increased 21%, reflecting continued consumer demand through digital channels. Comparable DTC sales rose 7%.
Wholesale revenue also contributed to overall growth, rising 12% year over year on a reported basis. Meanwhile, the Beyond Yoga brand recorded a 23% increase in revenue, continuing its expansion within the company’s portfolio.
Despite revenue gains, operating margin declined to 11.4% from 12.5% a year earlier. Adjusted EBIT margin also decreased, reflecting higher advertising expenses and the impact of tariffs. Gross margin was relatively stable at 61.9%, slightly down from 62.1% in the prior year.
#Profitability and Capital Allocation
Net income from continuing operations increased to $177 million, compared with $140 million in the same quarter last year. Adjusted net income reached $167 million, reflecting ongoing cost management alongside higher sales volumes.
Selling, general, and administrative expenses rose to $872 million, driven primarily by increased advertising tied to brand campaigns and higher sales activity. The company indicated that these investments are part of its broader strategy to support brand positioning and revenue growth.
During the quarter, Levi Strauss returned $214 million to shareholders through dividends and share repurchases. This included a $200 million accelerated share repurchase program, under which approximately 8 million shares were retired. The company also declared a dividend of $0.14 per share payable in May 2026.
The balance sheet showed cash and cash equivalents of approximately $717 million, with total liquidity around $1.6 billion. Inventory levels increased 4% year over year.
#Strategic Developments and Outlook
The quarter included the completion of the sale of the Dockers business, which has now been fully divested and classified under discontinued operations. The move reflects an ongoing focus on core brands and higher-growth categories.
Levi Strauss also announced a leadership transition, stating that its Chief Financial and Growth Officer will remain in the role until a successor is appointed, after which a transition to an advisory position is expected ahead of retirement.
For fiscal 2026, the company raised its guidance for reported net revenue growth to a range of 5.5% to 6.5%, compared with its previous outlook of 5% to 6%. Organic revenue growth is now expected between 4.5% and 5.5%. Adjusted diluted earnings per share are projected in the range of $1.42 to $1.48.
The updated outlook assumes no significant deterioration in macroeconomic conditions, including consumer demand, inflation, or supply chain disruptions. It also incorporates the expected impact of tariffs, with U.S. import tariffs on goods from China assumed at 30%.
#Industry Context and Ongoing Risks
Levi Strauss’ results come amid continued shifts in the global apparel sector, where brands are increasingly prioritizing direct-to-consumer channels to improve margins and customer engagement. The company’s DTC mix surpassing half of total revenue reflects this broader industry trend.
At the same time, external factors such as tariffs, foreign exchange fluctuations, and consumer spending patterns remain potential variables affecting performance. The company noted that forward-looking projections depend on assumptions about these conditions, which may change over time.
While the first-quarter results indicate strong demand and operational execution, the sustainability of growth will likely depend on how effectively Levi Strauss navigates these external pressures alongside its strategic initiatives.