Levi Strauss Q2 Earnings Beat, Raises Guidance

Levi Strauss & Co. (NYSE: LEVI) reported fiscal second-quarter 2026 results on July 8, 2026, delivering a Levi Strauss Q2 earnings beat that led the company to raise full-year guidance and increase its quarterly dividend after stronger direct-to-consumer sales and margin expansion.

Q2 Results and Momentum

For the quarter ended May 31, 2026, Levi Strauss reported net revenues of $1.56 billion, up 8.0% reported and 6.0% organic, with adjusted diluted earnings per share (EPS) of $0.28, a 27.0% increase year over year. These results exceeded analyst forecasts and reflected broad strength across markets, channels, and categories.

Gross profit reached $979.1 million, and gross margin expanded 10 basis points to 62.7%, supported by lower product costs and pricing actions despite tariff and foreign-exchange headwinds. Adjusted earnings before interest and taxes (EBIT) rose to $141.2 million, lifting the adjusted EBIT margin to 9.0% from 8.3% a year earlier.

Direct-to-consumer (DTC) net revenues increased 11.0% reported and 8.0% organic, with reported gains of 5.0% in the U.S., 12.0% in Europe, and 12.0% in Asia. Americas net revenues grew 9.0% reported and 7.0% organic, including a 5.0% reported increase in U.S. sales. Michelle Gass, president and chief executive, said, “The Levi’s brand is connecting with consumers around the world in more powerful ways than ever before.”

Guidance and Capital Returns

Levi Strauss raised its full-year 2026 guidance, now targeting reported net-revenue growth of 7.0% to 7.5% and adjusted diluted EPS of approximately $1.46 to $1.52. The company expects a full-year adjusted EBIT margin near 12.0% and a roughly 10-basis-point expansion in gross margin, passing the Q2 beat into the outlook. Management anticipates about 50 to 60 net new store openings globally in 2026.

The board increased the quarterly dividend to $0.16 per share from $0.14 per share after the quarter ended. The company returned $53.9 million in dividends during Q2 at the prior rate. An accelerated $200 million share-repurchase program launched in the first quarter is expected to settle in the third quarter.

Levi Strauss reported first-half net revenues of $3.30 billion, up 11.2% year over year, with net income from continuing operations of $271.9 million. Operating margin for the six months was 9.7%, slightly below 10.1% a year earlier, as higher selling, general, and administrative expenses and restructuring charges of $21.4 million partially offset margin gains. Operating cash flow more than doubled to over $482.3 million, leaving cash and cash equivalents of $849 million and total liquidity near $1.8 billion. Direct-to-consumer sales accounted for 52.0% of first-half net revenues.

Management reiterated a strategic shift toward a direct-to-consumer-first denim lifestyle model and restated a longer-term goal to reach $10 billion in revenue and a 15.0% operating margin.