Q2 Revenue and Profit Surpass Expectations
Levi Strauss & Co. reported a robust second quarter for fiscal year 2025, with net revenues reaching $1.45 billion — a 6% increase on a reported basis and a 9% gain on an organic basis. The Levi’s brand alone saw a 9% organic rise globally. CEO Michelle Gass stated the company “exceeded expectations across sales, margins and EPS,” attributing the results to broad-based growth and successful strategic execution.
Net income from continuing operations surged to $80 million, compared to $17 million in the same quarter last year. Diluted earnings per share climbed to $0.20, up from $0.04. Operating margin improved significantly, rising to 7.5% from 1.5%, and gross margin expanded by 140 basis points to 62.6%, driven by lower product costs and a favorable channel mix.
Regional Performance Highlights
Europe led in regional growth, with net revenues jumping 14% on a reported basis. The Americas followed with a 5% increase, while revenues in Asia remained flat. Direct-to-consumer (DTC) revenue rose 11%, and e-commerce sales climbed 13%, with DTC now accounting for 50% of total net revenue.
In April, Levi’s expanded its Red Tab loyalty program to four additional European markets, including Poland, Ireland, and Denmark, reinforcing its DTC strategy. While performance in Europe exceeded expectations, Asia faced challenges, with flat results in Q2 following a 6.6% gain in Q1. Analysts link the slowdown to growing anti-American sentiment in markets affected by U.S. tariffs.
H1 Financial Overview and Guidance Update
For the first half of fiscal 2025, Levi Strauss reported revenues of $2.97 billion, a 5% increase over the same period last year. Net income from continuing operations jumped to $220 million, compared to $7 million in H1 FY24, with diluted earnings per share improving to $0.55 from $0.02.
The company raised its full-year revenue forecast, now expecting 1% to 2% growth versus the previous guidance of a 1% to 2% decline. Adjusted diluted EPS guidance was also raised to $1.25 to $1.30, from the prior range of $1.20 to $1.25. Gross margin is expected to grow by 80 basis points, factoring in a 20 basis point tariff impact.
Industry Response and Market Dynamics
Industry analysts have responded positively. Chloe Collins of GlobalData cited Levi’s resilience, attributing success to a rise in Western fashion trends and its high-profile partnership with Beyoncé, particularly influential during her Cowboy Carter tour in Europe. The expansion of the Red Tab loyalty program has also strengthened consumer engagement in key European markets.
In contrast, Asia saw a decline in Q2 sales, a reversal from earlier growth, likely influenced by high U.S. tariffs and regional consumer sentiment. In the Americas, Q2 growth softened slightly to 5.1%, as consumers accelerated purchases ahead of anticipated price increases. Analysts expect slower sales in the second half as the full impact of tariffs is realized.
Levi Strauss delivered a strong Q2 performance, driven by strategic execution, direct-to-consumer growth, and strong regional sales in Europe and the Americas. The company’s raised outlook for fiscal 2025 reflects confidence in its ability to manage cost pressures, consumer shifts, and global trade dynamics. As tariff-related headwinds build, Levi’s adaptability and brand momentum will be key to sustaining growth through the rest of the year.
