Levi Strauss & Co. (NYSE:LEVI) reported what executives described as a “strong start” to fiscal 2026, delivering first-quarter results that exceeded expectations on both revenue and profitability and prompting the company to raise its full-year outlook. Management pointed to broad-based momentum across regions, channels, and product categories, alongside continued progress in its shift toward becoming a more direct-to-consumer (DTC)-first denim lifestyle company.
Leadership transition: CFO Harmit Singh to retire after planned transition
Early in the call, President and CEO Michelle Gass said the company announced that Chief Financial and Growth Officer Harmit Singh will retire after 13 years following a planned transition. Gass credited Singh with helping strengthen Levi Strauss’ financial foundation, expand margins, and evolve the business toward DTC.
Q1 performance: 9% organic revenue growth with strength across regions and channels
Gass said the company delivered “high single-digit organic net revenue growth,” with organic net revenues up 9% and reported revenues up 14%. Growth was driven by all regions and channels, with double-digit growth in Europe and Asia and 7% growth in the Americas.
By channel, Gass said DTC revenue increased 10% with comparable sales up 7%, marking the company’s 16th consecutive quarter of positive comps. E-commerce grew 17% in the quarter. Wholesale revenue grew 8%, which management said exceeded expectations.
By category and gender, the company highlighted faster growth in newer lifestyle areas alongside continued growth in core denim. Women’s revenue rose 13% and men’s revenue increased 7%, while tops grew 13% as Levi Strauss continues its “head-to-toe lifestyle” push.
Brand and product: Super Bowl campaign, collaborations, and premium expansion
Gass said the Levi’s brand grew 9% in the quarter and described a series of brand activations tied to the Super Bowl, including product drops, live music, workshops, and in-store appearances. She also cited collaborations such as a “new Nike apparel capsule” and “denim Nike Air Jordan 3s.”
During the Super Bowl, Levi Strauss launched its new global campaign, “Behind Every Original,” which Gass said will unfold throughout the year. She said early results were “very encouraging,” citing “more than 1.4 billion media impressions generated in February alone” and noting the campaign was recognized among top Super Bowl ads by outlets including Forbes, Ad Age, and Fast Company. Gass added the company announced a multi-year global partnership with Rosie of BLACKPINK, including co-created pieces expected later this year.
On the product front, Gass emphasized newness across fits and fabrics, pointing to updates to the 501 franchise such as 501 ’90s, 501 Curve, 501 Loose, and a “climate-adapting fabric innovation” called 501 Thermadapt. She also cited growth in newer fits and fashion silhouettes, including women’s Cinch Baggy extensions and new men’s baggy fits.
Gass said Levi Strauss has also shifted toward a “more globally directive assortment,” with product commonality in DTC up to “nearly 50%,” which she said has improved productivity through SKU reduction and enabled “fewer, bigger product stories.”
In premium, Gass said Blue Tab—described as the most premium expression of the Levi’s brand—delivered “robust growth” in Q1. In a later Q&A response, she added that Blue Tab is priced in the “$200-$300 range” as part of the company’s broader premiumization strategy.
Financial results: tariff pressure on gross margin, higher A&P spend, and EPS growth
Singh said the quarter reflected “high-quality, broad-based growth” and “stronger than expected profitability,” noting that wholesale outperformance drove much of the upside while DTC remained healthy.
Gross margin was 61.9%, which Singh said was “slightly better than external expectations,” but down 20 basis points year-over-year due primarily to tariffs. He said the decline was partially offset by pricing actions and lower promotional activity, and added the company has not seen demand impact from pricing moves to date.
Adjusted SG&A rose 16% driven by higher advertising and promotion (A&P), higher-than-expected sales volume, and foreign exchange. Singh said Levi Strauss expects marketing as a percentage of sales to be approximately flat year-over-year at around 7%.
Adjusted EBIT margin was 12.5%. Singh said that normalizing for the timing of A&P spending tied to the global campaign, adjusted EBIT margin would have been 14.1%. Adjusted diluted EPS was $0.42, up 11% and ahead of the company’s expectation, Singh said.
On inventory, Singh said reported inventory dollars ended up 4% year-over-year and the company is “comfortable with the quantity and quality” heading into spring.
Portfolio actions, cash returns, and updated guidance
Singh said Levi Strauss closed the Dockers transaction during the quarter, calling it a step that “further simplifies our portfolio and sharpens our focus on the Levi’s brand and Beyond Yoga.” He said adjusted free cash flow was $152 million, substantially higher than last year, and that free cash flow along with Dockers net proceeds enabled additional share repurchases.
He said total shareholder returns in the quarter increased 163% to $214 million. The company declared a quarterly dividend of $0.14 per share for Q2, up 8% year-over-year.
Levi Strauss raised its full-year outlook, while Singh emphasized management is remaining prudent given the macro environment and the early stage of the year. Updated fiscal 2026 guidance includes:
- Reported net revenue growth: 5.5% to 6.5%
- Organic net revenue growth: 4.5% to 5.5%
- Adjusted EBIT margin: approximately 12% (up from 11.8% to 12%)
- Adjusted diluted EPS: approximately $1.42 to $1.48 (up from $1.40 to $1.46)
For the second quarter, Singh guided to reported revenue growth of 4% to 5% and organic growth of 3% to 4%, with adjusted EBIT margin of 8% to 9% and adjusted diluted EPS of approximately $0.22 to $0.24. He also reiterated that Q2 growth will be affected by a timing shift tied to the Europe distribution center ramp last year, which benefited Q1 by about $30 million, or roughly 2 percentage points, and will offset Q2.
On tariffs, Singh said guidance assumes incremental U.S. tariffs at a 30% rate on imports from China and 20% for the rest of the world, and does not incorporate developments related to a Supreme Court ruling or efforts to reimpose tariffs. He added that if current 10% tariffs were to remain in place for the rest of the fiscal year, there could be an incremental benefit of approximately $35 million to cost of goods sold and $0.07 to EPS.
In Q&A, Gass said the company is “very cognizant of the environment,” but believes its momentum is tied to executing its strategies and noted consumers are responding to “innovation, newness,” and what she described as strong value. Singh said quarter-to-date trends remained positive and supportive of the updated outlook.
About Levi Strauss & Co. (NYSE:LEVI)
Levi Strauss & Co is a global apparel company best known for its denim jeans and casual wear. Founded in 1853 in San Francisco by Bavarian immigrant Levi Strauss, the company pioneered the modern blue jean with the introduction of rivet-reinforced work pants. Over its more than 160-year history, Levi Strauss has evolved into a lifestyle brand, offering a broad portfolio that includes denim for men, women and children, as well as tops, outerwear, footwear and accessories.
The company’s flagship label, Levi’s®, is recognized worldwide for its iconic styles such as the 501® Original Fit Jeans, while additional brands, including Dockers®, Target core metric, and Denizen® by Levi’s, cater to diverse price points and consumer segments.
