Levi Strauss & Co (LEVI) J.P. Morgan Retail Round Up Forum 2026 summary

Growth performance and strategy

• Achieved 9% organic and 14% reported growth, building on 7% growth last year, driven by DTC and wholesale strength across all geographies and categories.

• DTC now represents half of total business, with 10% growth in the quarter and 16 consecutive quarters of comp growth.

• Wholesale grew 8%, with balanced growth in men's and women's, tops and bottoms, and strong innovation and marketing campaigns fueling momentum.

• SKU rationalization reduced assortment by 25%, improving vendor negotiations, lowering markdowns, and supporting margin expansion.

• Strategic focus on expanding into premium (Blue Tab), value (Signature), and new categories like non-denim bottoms and tops, leveraging the denim lifestyle.

Regional and category opportunities

• Asia remains under-penetrated, representing 20% of business despite half the world's population; China, India, and Japan showed strong growth.

• Europe and the U.S. drove wholesale growth, with Europe expected to grow mid-single digits and Asia high single digits this year.

• Women's and tops categories are key growth drivers, with women's up 13% in the quarter and targeted to reach 50% of business.

• New store openings and e-commerce expansion are planned, with 50 net new stores guided for the year.

• Latin America, especially Mexico, presents further upside, while the U.S. continues to grow as the most mature market.

Financial outlook and margin management

• Gross margin guidance raised from flat to slightly up, with 30-40 bps annual accretion expected from SKU rationalization, pricing, and full-price selling.

• EBIT margin target is mid-teens over a multi-year period, driven by gross margin gains, SG&A leverage, and distribution cost optimization.

• Capital allocation prioritizes 3.5%-4% CapEx (mainly for growth), steady dividend increases, and buybacks to offset dilution.

• Tariff headwinds are being managed through pricing and cost actions, with potential upside from lower rates and tax refunds not yet in guidance.

• Prudent guidance reflects macro uncertainty, with agility to respond to consumer trends and operational efficiencies.