Levi Strauss & Co. (LEVI) beat expectations in the first quarter, delivering stronger-than-expected profits and expressing rare confidence in the face of Trump’s new tariffs.
The denim giant reported a profit of $135 million for the quarter ended March 2, a sharp turnaround from a $10.6 million loss in the same period last year.
Adjusted earnings per share came in at 38 cents, crushing Wall Street's estimate of 28 cents, according to FactSet.
Revenue rose 3.1% to $1.53 billion, excluding $67 million from Dockers, which has been reclassified as a discontinued operation.
The increase was driven largely by a 6% gain in Levi’s core Americas region. Direct-to-consumer sales surged 9%, while wholesale revenue slipped 3%.
“The Levi’s brand is stronger than ever, and we will continue to fuel this momentum through a robust product pipeline and by keeping the brand firmly at the center of culture across the globe,” said CEO Michelle Gass.
Analysts had projected revenue of $1.54 billion. Shares jumped 4.8% to $14.15 in after-hours trading Monday.
Trump's tariffs had no effect on Levi's guidance
Despite economic uncertainty and fresh U.S. tariffs, Levi’s is sticking with its full-year guidance.
Chief Financial and Growth Officer Harmit Singh told investors most of Levi’s spring and early summer inventory has already arrived in the U.S., softening the tariff impact for the current quarter.
“We’re trying to put in place a mitigation plan where the impact to the consumer is minimal,” Singh said. “The tariffs have just happened, and so it’s a 24/7 job for the company.”
According to The Wall Street Journal, Levi’s has already formed a team to assess the implications of former President Trump's new tariffs.
Looking ahead, Singh said Levi’s expects “minimal impact” on second-quarter margins. He added that the company’s strong balance sheet and global footprint position it well to manage any disruptions.
Levi’s 2025 forecast excludes potential fallout from macroeconomic shocks, inflation, supply chain issues, and retaliatory tariffs.
The company sources its products from around 30 countries, with no more than 30% coming from any single nation. Fewer than 1% of its U.S.-sold products are made in China.
“It’s early days, but we’ve seen the consumer remain generally resilient,” Singh said. “In our experience, the U.S. consumer gravitates to brands they can trust during times like these.”
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