Levi Strauss raises earnings forecast on tariff windfalls

The company lifted its adjusted earnings per share guidance to a range of $1.54 to $1.56, up from the prior forecast of $1.46 to $1.52. This adjustment follows a third quarter where tariff refunds contributed 4.9% to the operating margin and added 16 cents to earnings per share. However, net revenue growth projections were trimmed to 7%, sliding to the bottom of the earlier 7% to 7.5% range. For the quarter ending August 30, revenue reached $1.61 billion, slightly trailing the $1.62 billion analysts anticipated.

Operational performance proved uneven across channels. While wholesale revenue climbed 6%, direct-to-consumer sales grew only 2% with comparable sales remaining flat. CEO Michelle Gass acknowledged that the direct-to-consumer segment underperformed internal expectations, though she noted an uptick in recent trends. The company reported a net income of $168.6 million, a decline from the $218.1 million recorded during the same period last year. Investors reacted with caution, leaving shares roughly flat in extended trading.