CORRECTING and REPLACING Levi Strauss & Co. Reports Better Than Expected First-Quarter 2025 Financial Results

Reported Net Revenues up 3%, Organic Net Revenues up 9%

Operating Margin of 12.5%; Adjusted EBIT Margin of 13.4%, up 400 Basis Points to PY

Continuing Operations Diluted EPS of $0.35, Adjusted Diluted EPS of $0.38, up 52% Year Over Year

Dockers® Business Reclassified as Discontinued Operations in Q1

Company Maintains Full Year Outlook Excluding the Impact of Recent Tariffs

SAN FRANCISCO–(BUSINESS WIRE)–In the penultimate table titled Discontinued Operations – Dockers®, the Full-Year figures for the Year Ended December 1, 2024 (Dollars and shares in millions, except per share amounts) should read: Operating income:  $262.7 (instead of $379.6); Income (loss) from continuing operations before income taxes: $217.6 (instead of $334.5); Net income (loss) from continuing operations: $210.4 (instead of $327.3); Net income (loss): $210.6 (instead of $327.5); Earnings (loss) per common share: Continuing operations – Basic: $0.53 (instead of $0.82); Earnings (loss) per common share: Net income (loss) – Basic: $0.53 (instead of $0.82); Earnings (loss) per common share: Continuing operations – Diluted: $0.52 (instead of $0.81); Earnings (loss) per common share: Net income (loss) – Diluted: $0.52 (instead of $0.81).

The updated release reads: 

LEVI STRAUSS & CO. REPORTS BETTER THAN EXPECTED FIRST-QUARTER 2025 FINANCIAL RESULTS

Reported Net Revenues up 3%, Organic Net Revenues up 9%

Operating Margin of 12.5%; Adjusted EBIT Margin of 13.4%, up 400 Basis Points to PY

Continuing Operations Diluted EPS of $0.35, Adjusted Diluted EPS of $0.38, up 52% Year Over Year

Dockers® Business Reclassified as Discontinued Operations in Q1

Company Maintains Full Year Outlook Excluding the Impact of Recent Tariffs

Levi Strauss & Co. (NYSE: LEVI) today announced financial results for the first quarter ended March 2, 2025. The following information is based on continuing operations which excludes approximately $67 million of net revenues related to Dockers®.

“We exceeded revenue and profitability expectations in Q1 marking a strong start to the year, another proof point that our transformation strategy is working,” said Michelle Gass, President and CEO of Levi Strauss & Co. “The Levi’s® brand is stronger than ever, and we will continue to fuel this momentum through a robust product pipeline and by keeping the brand firmly at the center of culture across the globe. While we recognize that we are operating in an uncertain environment, our global footprint, strong margin structure, and agile supply chain position us to navigate the balance of the year and beyond.”

“We delivered significant margin expansion and double-digit earnings growth in the first quarter, and the strong momentum continued through March,” said Harmit Singh, Chief Financial and Growth Officer of Levi Strauss & Co. “Looking forward, we are maintaining our 2025 top- and bottom-line guidance, which excludes any impact from the recent tariff announcements, and we anticipate minimal impact to our Q2 margin outlook. In addition, our strong balance sheet, improved structural economics and the underlying strength of our business all give us confidence in our path forward.”

Financial Highlights

• Net Revenues of $1.5 billion were up 3% on a reported basis and 9% on an organic basis versus Q1 2024. The Levi’s® brand was up 8% globally on an organic basis.
  • In the Americas, net revenues increased 6% on a reported basis and 11% on an organic basis. Within the Americas, the U.S. grew 8% on an organic basis.
  • In Europe, net revenues decreased 5% on a reported basis and increased 3% on an organic basis.
  • Asia net revenues increased 7% on a reported basis and 10% on an organic basis.
  • Beyond Yoga® net revenues increased 10% on a reported and organic basis.
• DTC (Direct-to-Consumer) net revenues increased 9% on a reported basis and 12% on an organic basis. DTC growth on an organic basis reflected an 8% increase in the U.S., an 11% increase in Europe and a 14% increase in Asia. Net revenues from e-commerce grew 13% on a reported basis and 16% on an organic basis. DTC comprised 52% of total net revenues in the first quarter.
• Wholesale net revenues decreased 3% on a reported basis and increased 5% on an organic basis.

• Operating margin was 12.5% compared to 0.04% in Q1 2024. Adjusted EBIT margin increased 400 basis points to 13.4% from 9.4% last year on a reported basis primarily due to higher gross margin.
  • Gross margin increased 330 basis points to 62.1% from 58.8% in Q1 2024 primarily driven by lower product costs and favorable channel and brand mix.
  • Selling, general and administrative (SG&A) expenses were $749 million compared to $756 million in Q1 2024. Adjusted SG&A was up 1.7% to $744 million compared to $731 million last year. As a percentage of sales, adjusted SG&A was 48.7% compared to 49.4% last year.
  • Restructuring charges were $7 million related to Project Fuel.
• Interest and other expenses, net, which include foreign exchange losses, were $15 million in the aggregate compared to $12 million in Q1 2024.
• The effective income tax rate was 20.6%, compared to 15.9% in Q1 2024.
• Net income from continuing operations was $140 million compared to net loss from continuing operations of $10 million in Q1 2024. Adjusted net income was $150 million compared to $100 million in Q1 2024.
• Diluted earnings per share from continuing operations was $0.35 compared to diluted loss per share from continuing operations of $0.03 in Q1 2024. Adjusted diluted earnings per share was $0.38 compared to $0.25 in Q1 2024.

Additional information regarding Adjusted SG&A, Adjusted EBIT, Adjusted EBIT margin, Adjusted net income, Adjusted diluted earnings per share, Adjusted free cash flow as well as amounts presented on an organic net revenues basis and constant-currency basis, all of which are non-GAAP financial measures, is provided at the end of this press release.

Balance Sheet Review as of March 2, 2025

• Cash and cash equivalents were $574 million, while total liquidity was approximately $1.4 billion.
• Total inventories increased 7% on a dollar basis. We have secured the majority of inventory required to meet U.S. orders for Q2.

Shareholder Returns

The company returned approximately $81 million to shareholders in the first quarter, a 12% increase over prior year, including:

• Dividends of $51 million, representing a dividend of $0.13 per share.
• Share repurchases of $30 million, reflecting 1.6 million shares retired.

As of March 2, 2025, the company had $560 million remaining under its current share repurchase authorization, which has no expiration date.

The company has declared a dividend of $0.13 per share totaling approximately $51 million. The dividend is payable in cash on May 9, to the holders of record of Class A common stock and Class B common stock at the close of business on April 24.

Fiscal 2025 Guidance

Guidance for 2025 is based on continuing operations, reflecting the Dockers® business being reported in discontinued operations. Financial results for prior periods have been recast to exclude discontinued operations.

The company’s fiscal 2025 guidance remains unchanged other than to reflect the Dockers® business as a discontinued operation and does not reflect any impact from the recently announced tariffs.

This outlook also assumes no significant worsening of macro-economic pressures on the consumer, inflationary pressures, recessionary concerns, supply chain disruptions, increased tariffs and retaliatory actions taken in response to such tariffs, or currency impacts. Adjusted diluted EPS is a non-GAAP measure. A reconciliation of non-GAAP forward looking information to the corresponding GAAP measures cannot be provided without unreasonable efforts due to the challenge in quantifying various items including but not limited to, the effects of foreign currency fluctuations, taxes, increased tariffs and retaliatory actions, and any future restructuring, restructuring-related, severance and other charges.

Investor Conference Call

To access the conference call, please pre-register on https://register-conf.media-server.com/register/BI0caeeb2209f743f9aa7bf696eab28afb and you will receive confirmation with dial-in details. A live webcast of the event can be accessed on https://edge.media-server.com/mmc/p/imssompy/.

A replay of the webcast will be available on http://investors.levistrauss.com starting approximately two hours after the event and archived on the site for one quarter.

About Levi Strauss & Co.

Levi Strauss & Co. (LS&Co.) is one of the world’s largest brand-name apparel companies and a global leader in jeanswear. The company designs and markets jeans, casual wear and related accessories for men, women and children under the Levi’s®, Levi Strauss Signature™, Denizen®, Dockers® and Beyond Yoga® brands. Its products are sold in approximately 120 countries worldwide through a combination of chain retailers, department stores, online sites, and a global footprint of approximately 3,200 retail stores and shop-in-shops. Levi Strauss & Co.’s reported 2024 net revenues were $6.4 billion. For more information, go to http://levistrauss.com, and for financial news and announcements go to http://investors.levistrauss.com.

Forward-Looking Statements

This press release and related conference call contains, in addition to historical information, forward-looking statements, including statements related to: future financial results, including the company’s expectations for the full fiscal year 2025 net revenues (both reported and on an organic net revenues basis), adjusted EBIT margins, adjusted SG&A, adjusted diluted earnings per share and effective tax rate; progress against strategic priorities; the ongoing restructuring of our operations and our ability to achieve any anticipated cost savings associated with such restructuring; trajectory of direct-to-consumer business; macroeconomic conditions, including impacts of newly imposed U.S. tariffs and any additional responsive non-U.S. tariffs or additional U.S. tariffs; impacts of foreign exchange; capital expenditures; pricing initiatives; inventory growth; new store openings; investments in high growth initiatives; future dividend payments and share repurchases; and efforts to diversify product categories and distribution channels, and the related revenue projections. The company has based these forward-looking statements on its current reasonable assumptions, expectations and projections about future events. Words such as, but not limited to, “believe,” “will,” “may,” “so we can,” “when,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “could” and similar expressions are used to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements are necessarily estimates reflecting the best judgment of our senior management and involve a number of risks and uncertainties, some of which are beyond our control, that could cause actual results to differ materially from those suggested by the forward-looking statements. Investors should consider the information contained in the company’s filings with the U.S. Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for fiscal year 2024 especially in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Summary of Risk Factors” and “Risk Factors” sections and its Quarterly Report on Form 10-Q for the quarter ended March 2, 2025, especially in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, section. Other unknown or unpredictable factors also could have material adverse effects on future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release and related conference call may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated or, if no date is stated, as of the date of this press release and related conference call. The company is not under any obligation and does not intend to update or revise any of the forward-looking statements contained in this press release and related conference call to reflect circumstances existing after the date of this press release and related conference call or to reflect the occurrence of future events, even if such circumstances or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized.

Non-GAAP Financial Measures

The company reports its financial results in accordance with generally accepted accounting principles in the United States (GAAP) and the rules of the SEC. To supplement its financial statements prepared and presented in accordance with GAAP, the company uses certain non-GAAP financial measures, such as Adjusted SG&A, Adjusted SG&A margin, Adjusted EBIT (both reported and on a constant-currency basis), Adjusted EBIT margin (both reported and on a constant-currency basis), Adjusted EBITDA, Adjusted net income (both reported and on a constant-currency basis), Adjusted diluted earnings per share (both reported and on a constant-currency basis), organic net revenues, Adjusted free cash flow, and return on invested capital to provide investors with additional useful information about its financial performance, to enhance the overall understanding of its past performance and future prospects and to allow for greater transparency with respect to important metrics used by management for financial and operating decision-making. The company presents these non-GAAP financial measures to assist investors in seeing its financial performance from management’s view and because it believes they provide an additional tool for investors to use in computing the company’s core financial performance over multiple periods with other companies in its industry. The tables found below present Adjusted SG&A, Adjusted SG&A margin, Adjusted EBIT (both reported and on a constant-currency basis), Adjusted EBIT margin (both reported and on a constant-currency basis), Adjusted EBITDA, Adjusted net income (both reported and on a constant-currency basis), Adjusted diluted earnings per share (both reported and on a constant-currency basis), organic net revenues, Adjusted free cash flow, and return on invested capital and corresponding reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP. Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. Certain items that may be excluded or included in non-GAAP financial measures may be significant items that could impact the company’s financial position, results of operations and cash flows and should therefore be considered in assessing the company’s actual financial condition and performance. Non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgment by management in determining how they are formulated. Some specific limitations include but are not limited to, the fact that such non-GAAP financial measures: (a) do not reflect cash outlays for capital expenditures, contractual commitments or liabilities including pension obligations, post-retirement health benefit obligations and income tax liabilities; (b) do not reflect changes in, or cash requirements for, working capital requirements; and (c) do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on indebtedness. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, the company’s financial results prepared in accordance with GAAP. The company urges investors to review the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures included in this press release, and not to rely on any single financial measure to evaluate its business. See “RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES” below for reconciliation to the most comparable GAAP financial measures. A reconciliation of non-GAAP forward looking information to the corresponding GAAP measures cannot be provided without unreasonable efforts due to the challenge in quantifying various items including but not limited to, the effects of foreign currency fluctuations, taxes, and any future restructuring, restructuring-related, severance and other charges.

Organic Net Revenues and Constant-currency

The company reports net revenues in accordance with GAAP, as well as on an organic net revenues basis in order to facilitate period-to-period comparisons of our revenues which excludes the impact of fluctuating foreign currency exchange rates from the change in reported net revenues, net revenues derived from business acquisitions or divestitures impacting the previous 12 months of the reporting date and the estimated impact of any 53rd week. The company reports certain operating results in accordance with GAAP, as well as on a constant-currency basis in order to facilitate period-to-period comparisons of its results without regard to the impact of fluctuating foreign currency exchange rates.

The term foreign currency exchange rates refers to the exchange rates used to translate the company’s operating results for all countries where the functional currency is not the U.S. Dollar into U.S. Dollars. Because the company is a global company, foreign currency exchange rates used for translation may have a significant effect on its reported results. In general, the company’s financial results are affected positively by a weaker U.S. Dollar and are affected negatively by a stronger U.S. Dollar as compared to the foreign currencies in which it conducts its business. References to operating results on a constant-currency basis mean operating results without the impact of foreign currency translation fluctuations.

The company calculates constant-currency amounts by translating local currency amounts in the prior-year period at actual foreign currency exchange rates for the current period. Constant-currency results do not eliminate the transaction currency impact, which primarily includes the realized and unrealized gains and losses recognized from the measurement and remeasurement of purchases and sales of products in a currency other than the functional currency and of forward foreign exchange contracts.

The company believes disclosure of organic net revenues and Adjusted EBIT constant-currency, Adjusted EBIT Margin constant-currency and Adjusted Net Income constant-currency results are helpful to investors because it facilitates period-to-period comparisons of its results by increasing the transparency of the underlying performance by excluding the impact of fluctuating foreign currency exchange rates. However, organic net revenues and constant-currency results are non-GAAP financial measures and are not meant to be considered in isolation or as a substitute for comparable measures prepared in accordance with GAAP. Organic net revenues and constant-currency results have no standardized meaning prescribed by GAAP, are not prepared under any comprehensive set of accounting rules or principles and should be read in conjunction with the company’s consolidated financial statements prepared in accordance with GAAP. Organic net revenues and constant-currency results have limitations in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies.

Source: Levi Strauss & Co. Investor Relations

Contacts

Investor Contact:

Aida Orphan

Levi Strauss & Co.

(415) 501-6194

Investor-Relations@levi.com

Media Contact:

Elizabeth Owen

Levi Strauss & Co.

(415) 501-7777

NewsMediaRequests@levi.com

Read full story here