Levi Strauss & Co (LEVI) Q1 2025 earnings summary

Executive summary

• Achieved 9% organic net revenue growth year-over-year, with reported net revenues up 3% to $1.53 billion, driven by strong DTC and wholesale performance and the Levi's® brand up 8% globally on an organic basis.

• Net income from continuing operations was $140.2 million, reversing a prior year loss, with adjusted diluted EPS up 52% to $0.38.

• Operating margin improved to 12.5%, and adjusted EBIT margin expanded 400 basis points to 13.4% year-over-year.

• Women's business accelerated, now 38% of net revenues, with double-digit growth for four consecutive quarters.

• Dockers® business reclassified as discontinued operations and held for sale; Denizen® brand wind-down substantially complete.

Financial highlights

• Gross margin reached a record 62.1%, up 330 basis points year-over-year, with gross profit at $947.6 million.

• Adjusted EBIT was $204 million, up 47% year-over-year; adjusted net income was $150 million, up 49%.

• Adjusted diluted EPS was $0.38, up from $0.25 year-over-year.

• Cash from operations was $52.5 million, down from $286 million, mainly due to higher inventory and incentive payments.

• Ended quarter with $574 million in cash and $993.5 million in total debt, all at fixed rates.

Outlook and guidance

• Full-year outlook remains unchanged, with no impact from proposed tariffs included; fiscal 2025 guidance projects 3.5%-4.5% organic net revenue growth and gross margin expansion to 61.6%.

• Adjusted EBIT margin expected to expand to 11.4%-11.6%; adjusted diluted EPS forecasted at $1.20-$1.25.

• Second Quarter organic net revenue growth expected at 3.5%-4.5%; reported revenue flat to up 1% due to FX and business exits.

• Gross margin for Q2 expected to rise 80-100 basis points; adjusted EBIT margin projected at 5.5%-6%.

• Adjusted diluted EPS for Q2 forecasted at $0.11-$0.13, with a $0.03 headwind from FX and higher tax.