Levi’s Q3 profit tops estimates as DTC drives sales; could double U.S. store count
Levi Strauss & Co. reported another solid quarter and raised its full-year outlook as its shift from being a traditional jeans brand to a “DTC-first, head-to-toe denim lifestyle” retailer continues to win over both male and female shoppers.
The apparel giant posted its fourth consecutive quarter of high-single-digit growth and 14th consecutive quarter of positive comp growth. Levi’s said its growth was broad-based across its business, including DTC and wholesale, international and domestic, women's and men's, and tops and bottoms. It also saw growth across regions.
On the company’s earnings call, CEO Michelle Gass, who took the helm in January 2024, said Levi’s has the potential to double its U.S. store count. The brand currently has more than 450 stores in the U.S., according to its most recent annual report.
Levi's women's activewear brand, Beyond Yoga, is also expanding its footprint. It has new stores opening in Boston, Houston, and two more in Northern California, bringing its total store count to 14.
In an interview with CNBC, Gass said Levi’s has started to raise the price of some of its jeans and clothes and will hike more prices in the U.S. and other markets next year.
“As we’ve been taking these targeted actions, we’ve not seen an impact to demand,” she said. We’ll of course, stay very, very close to that but... we’re taking a surgical, thoughtful approach on any pricing.”
Third Quarter
Levi's net income totaled $218 million, or $0.55 per share, for the quarter ended Aug. 31, compared with $20.7 million, or $0.05 per share, in the year-ago period. Adjusted earnings were $0.34 cents per share, topping analysts estimates of $0.31 per share.
Revenue rose 7% to $1.54 billion, roughly in line with estimates. Beyond Yoga third-quarter net revenues increased 2%.
Direct-to-consumer revenue, or sales from Levi’s website and stores, rose 11%, with a 7% increase in the U.S., a 4% increase in Europe and a 14% increase in Asia. Wholesale net revenues increased 3%.
Net revenues from e-commerce grew 18%, and made up 46% of total net revenues in the third quarter.
"We delivered another very strong quarter as our pivot to becoming a DTC-first, head-to-toe denim lifestyle retailer is driving a meaningful inflection in our financial performance,” Gass said in the earnings statement. “With strength across channels, segments and categories, we are raising our full-year outlook and are well-positioned for the holiday season. While the macro environment remains complex, the consistency of our performance and operational agility gives me confidence that we will deliver sustained, profitable growth into 2026 and beyond.”
Levi’s now expects its full year sales to increase 3%, up from its prior guidance of between 1% and 2% growth. It expects full-year adjusted earnings per share to be between $1.27 and $1.32, up from a prior range of between $1.25 and $1.30.
Levi’s products are sold in approximately 120 countries worldwide through a combination of chain retailers, department stores, online sites, and a global footprint of approximately 3,200 retail stores and shop-in-shops.
