Why Levi Strauss Stock Popped Today
Key Points
Levi's direct-to-consumer sales are booming.
The company's wholesale business is also performing well.
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Shares of Levi Strauss (NYSE: LEVI) climbed on Wednesday after the apparel company reported rising sales and profits.
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Broad-based growth
Levi's net revenue grew 14% year over year to $1.7 billion in its fiscal 2026 first quarter, which ended on March 1. The denim designer saw solid gains across its brands, geographic segments, and distribution channels.
Levi's wholesale revenue, which includes sales to department stores and other retailers, rose 12%.
Better still, its direct-to-consumer (DTC) revenue, which includes sales via its branded retail stores, outlets, and websites, jumped 16%. DTC gains were driven by a 21% surge in e-commerce sales. These higher-margin DTC sales now account for over half of Levi's total revenue.
"Our evolution into a DTC-first denim lifestyle brand is allowing us to capture a much larger addressable market and deliver faster and more consistent growth," CEO Michelle Gass said.
All told, Levi's adjusted net income increased 11% to $167 million, or $0.42 per share. That topped Wall Street's estimates, which had called for per-share profits of $0.37.
More gains to come
These strong results and positive ongoing sales trends prompted Levi to boost its full-year outlook. The company now projects revenue growth of 5.5% to 6.5% in fiscal 2026, up from a prior forecast of 5% to 6%. Management also expects adjusted earnings per share of $1.42 to $1.48, up from $1.40 to $1.46.
These estimates might prove conservative. The blue jeans maker's profits stand to benefit from recently reduced tariff rates. Levi's successful DTC push could also continue to drive its earnings above investors' expectations in the year ahead.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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