Levi Strauss Lifts Yearly Outlook After Q1 Sales Beat

LEVI STRAUSS & CO- CLASS A has raised its annual sales and profit forecasts after exceeding first-quarter estimates, driven by strong demand for premium denim and growth in its direct-to-consumer operations. The company is successfully navigating economic headwinds and trade pressures by optimizing its supply chain and focusing on high-margin sales channels.

For fiscal 2026, the apparel giant now expects net revenue growth between 5.5% and 6.5%, an increase from its previous forecast of 5% to 6%. This updated guidance sits above the 5.7% growth projected by analysts. The company also increased its annual adjusted earnings per share outlook to a range of $1.42 to $1.48, up from the prior estimate of $1.40 to $1.46. Management noted that consumer interest in core denim remains resilient despite budget constraints affecting some household segments.

To counter the impact of import duties in the United States, the company has implemented a combination of price hikes, cost controls, and supplier negotiations. It has also worked to diversify its manufacturing base to reduce its reliance on China. While the firm previously anticipated a $100 million hit to fiscal 2026 margins, it expects to fully offset these costs through its ongoing strategic initiatives.

In the first quarter ended March 1, net revenue rose 14% to $1.74 billion, beating the average analyst estimate of $1.65 billion. Adjusted earnings were reported at 42 cents per share, compared to 38 cents in the previous year. Regional performance was strong across the board, with sales in the Americas rising 9%, Europe increasing 24%, and Asia growing 13%.

The direct-to-consumer segment, which includes the brand's own stores and website, saw comparable sales grow by 7% during the quarter. Finance chief Harmit Singh previously highlighted the strength of various product categories at an industry event.

Its premium denim line Blue Tab, non-denim mens bottoms, and womens denim skirts and dresses had been selling well.

The company's robust performance mirrors recent trends reported by ABERCROMBIE & FITCH CO-CL A and GAP INC/THE. These retailers have similarly noted that shoppers are continuing to prioritize spending on wardrobe staples like jeans, even as they face broader economic pressures.