Levi Strauss & Co. reported better-than-expected quarterly earnings on Monday and maintained its full-year outlook, excluding the effects of new U.S. tariffs. The company’s positive results pushed its shares up more than 7% in after-hours trading.
Despite ongoing concerns over U.S. tariffs imposed by President Donald Trump—particularly their impact on global trade and consumer prices—Levi Strauss remains confident in its ability to navigate the uncertain landscape.
“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,” said CEO Michelle Gass in a statement.
The company noted earlier this year that it sources its products from 25 different countries, which gives it flexibility. Only about 1% of its goods come directly from China to the U.S., while imports from Mexico make up around 5%.
To address rising costs, Levi is considering selective price increases. Gass said these increases would be “surgical” in nature, meaning they will be targeted and not across the board.
The company continues to see steady demand for both wide-leg and skinny jeans, in line with fashion trends embraced by competitors like Abercrombie & Fitch and Gap, even as consumers remain cautious with non-essential spending.
In its quarterly report, Levi stated it is closely analyzing the effects of tariffs and seeking ways to lessen the impact. The company warned that tariffs could significantly affect its 2025 performance.
“We expect these new tariffs to have a material impact on our results of operations in fiscal year 2025,” Levi said in its filing. The company also raised concerns that continued trade disruptions might force changes in its sourcing strategies, potentially increasing product costs.
“If these disruptions persist, they may require us to modify our current sourcing practices, which may impact our product costs, and, if not mitigated, could have a material adverse effect on our business and results of operations,” the filing added.
CFO Harmit Singh echoed this caution during the company’s earnings call, saying, “Given that the situation is fluid and unprecedented, the impacts are uncertain.”
Rachel Wolff, an analyst at eMarketer, commented on the company’s steady outlook. “Levi Strauss’s unchanged forecast shows the sheer impossibility of planning ahead, as uncertainty surrounding Trump’s tariff moves paralyzes brands,” she said.
As part of a broader effort to streamline its business, Levi confirmed it is exploring a sale of its Dockers brand, which has been underperforming in recent years.
For fiscal 2025, Levi expects net revenue to decline by 1% to 2%, with adjusted earnings projected between $1.20 and $1.25 per share.
In the latest quarter, the company posted an adjusted profit of 38 cents per share, well above Wall Street’s forecast of 28 cents.
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