Levi Strauss & Co reported net revenues of US$1.5 billion for the third quarter ended August 31, 2025, marking a 7 per cent increase both on a reported and organic basis compared to Q3 2024.
Asia led regional performance with a 12 per cent increase in net revenues on both a reported and organic basis. The Americas followed, posting a 6 per cent reported and 7 per cent organic growth, with the US contributing a 3 per cent organic increase. Europe also saw solid results, with net revenues rising 5 per cent on a reported basis and 3 per cent organically.
Direct-to-Consumer (DTC) sales climbed 11 per cent, making up 46 per cent of total revenue in Q3, with e-commerce net revenues up 18 per cent. Wholesale revenues rose 3 per cent on a reported basis and 5 per cent on an organic basis. Gross margin improved 110 bps to 61.7 per cent, driven by pricing and channel mix, despite tariff impacts.
Operating margin jumped to 10.8 per cent from 2.3 per cent, while adjusted EBIT margin slightly declined to 11.8 per cent from 12.3 per cent last year due to higher selling, general, and administrative (SG&A) expenses, which rose to US$776 million from US$726 million in the same quarter of the prior year.
Net income from continuing operations surged to US$122 million from US$23 million, and adjusted net income reached US$136 million from US$134 million. Diluted earnings per share (EPS) grew to US$0.31 from US$0.06, with adjusted EPS at US$0.34 compared to US$0.33. The quarter also included US$9 million in restructuring costs related to Project Fuel, and a 21.9 per cent effective tax rate from 1.9 percent in Q3 2024.
The company finalised the sale of the Dockers intellectual property and operations in the US and Canada, resulting in gross proceeds of US$194.7 million. The transaction involving the remaining Dockers operations is anticipated to be completed in Q1 2026.
Levi Strauss’ updated fiscal 2025 guidance projects approximately 3 per cent reported net revenue growth from continuing operations, up from the earlier estimate of 1 per cent to 2 per cent. The update reflects the reclassification of the Dockers business as discontinued operations.
The outlook is established on the assumption that US tariffs on Chinese imports will stay at 30 per cent and Rest-of-the-World at 20 per cent for the rest of the year.
“We delivered another very strong quarter as our pivot to becoming a DTC-first, head-to-toe denim lifestyle retailer is driving a meaningful inflection in our financial performance,” said Michelle Gass, President and CEO of Levi Strauss & Co.
“With strength across channels, segments and categories, we are raising our full-year outlook and are well-positioned for the holiday season. While the macro environment remains complex, the consistency of our performance and operational agility gives me confidence that we will deliver sustained, profitable growth into 2026 and beyond.”
“With four consecutive quarters of high-single-digit growth and record gross margins driven by our focus on profitability across the organization, we are raising our full-year revenue and adjusted diluted EPS expectations. We have built strong momentum that positions us well to continue delivering strong shareholder value next year and in the years to come,” said Harmit Singh, Chief Financial and Growth Officer of Levi Strauss & Co.
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