Levi Strauss & Co (LEVI) Q1 2026 earnings summary

Executive summary

• Net revenues rose 14.1% year-over-year to $1.74 billion, with organic net revenues up 9% and DTC comprising 52% of total revenues; growth was broad-based across all regions and channels.

• Net income from continuing operations increased 26.3% to $177.1 million, with diluted EPS from continuing operations at $0.45 and adjusted diluted EPS at $0.42, both above guidance.

• Adjusted EBIT grew 6.8% to $217.8 million, with double-digit earnings growth and margin expansion surpassing expectations.

• The Dockers® business was fully divested in Q1 2026, reported as discontinued operations.

• CFO Harmit Singh announced retirement after 13 years, with a transition plan in place.

Financial highlights

• Gross margin was 61.9%, slightly down year-over-year due to tariffs, partially offset by pricing and lower promotions.

• Adjusted EBIT margin was 12.5% (down from 13.4%); operating margin was 11.4% (down from 12.5%).

• Adjusted diluted EPS was $0.42, up 11% year-over-year.

• Adjusted free cash flow was $152 million, up from negative $14 million in the prior year.

• Cash and cash equivalents at quarter-end were $717 million; total liquidity approximately $1.6 billion.

Outlook and guidance

• Full-year reported net revenue growth expected at 5.5%-6.5%, organic at 4.5%-5.5%, both raised by 0.5 point.

• Gross margin now expected flat to slightly up; adjusted EBIT margin expected at ~12% (up from 11.8%-12%).

• Adjusted diluted EPS guided to $1.42-$1.48, including a $0.04 headwind from higher tax rate.

• Q2 reported revenues expected up 4%-5%, organic up 3%-4%; gross margin slightly down due to FX; adjusted EBIT margin 8%-9%.

• Management expects adequate liquidity for the next 12 months and plans continued capital investments in stores, distribution, and technology.