Levi Strauss (LEVI) Q3 FY2026 Earnings Call: Margin Expansion, DTC Reset and Updated Guidance
Source Tradingkey
Key Takeaways
- Levi Strauss & Co. (NYSE: LEVI) reported fiscal Q3 2026 net revenue growth of 4% on a reported basis and 5% organically. Year-to-date organic revenue increased 7%.
- Gross margin expanded 450 basis points to 66.2%. Tariff refunds, net of reinvestment, contributed 370 basis points; the remaining 80-basis-point improvement reflected lower product costs, partly offset by foreign exchange.
- Global direct-to-consumer revenue grew 2%, with comparable sales flat, as weaker traffic in the U.S. and Europe offset double-digit e-commerce growth and continued strength in Asia and Latin America.
- Global wholesale revenue increased 6%, while international revenue grew 8%. Asia posted its third consecutive quarter of double-digit growth, with revenue up 10%, and China grew 13%.
- Management expects fiscal 2026 organic revenue growth of approximately 6%, reported growth of approximately 7%, and adjusted diluted EPS of $1.54 to $1.56.
- The company recorded approximately $80 million in tariff refunds and plans to reinvest roughly three-quarters of the benefit in marketing, supply-chain capabilities and targeted holiday promotions.
Core Financial Data
| Metric | Fiscal Q3 2026 result | Change or context |
|---|---|---|
| Reported net revenue | — | Up 4% year over year |
| Organic net revenue | — | Up 5% year over year |
| Gross margin | 66.2% | Up 450 basis points |
| Adjusted SG&A as a percentage of revenue | 50.8% | Included about $6 million, or 40 basis points, of tariff-benefit reinvestment |
| Adjusted EBIT margin | 15.5% | Net tariff benefit contributed 330 basis points |
| Adjusted diluted EPS | $0.48 | Included an $0.11 net benefit from tariff refunds; excluding it, EPS grew 9% |
| Inventory | — | Down 3% year over year |
| Dividends paid | $62 million | Up 11% year over year |
| Additional planned share repurchase | $100 million | To be executed through an accelerated share repurchase program |
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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