Levi Strauss raises outlook as CFO confirms departure

Levi Strauss & Co. reported first quarter net revenues of $1.74 billion, up 14% on a reported basis and 9% organically, with direct-to-consumer (DTC) sales now accounting for 52% of total revenue.

The San Francisco-based denim and apparel group, which operates the Levi's and Beyond Yoga brands across approximately 3,300 stores and shop-in-shops in 120 countries, said revenue exceeded guidance.

The results reflect continuing operations following the completed sale of Dockers, with the transaction closing on 27 February 2026.

Channel and regional performance

DTC led channel growth, with revenue increasing 16% on a reported basis and 10% organically. E-commerce revenue rose 21% on a reported basis and 17% organically.

Wholesale revenue increased 12% on a reported basis and 8% organically, indicating that Levi Strauss expanded both its owned and external distribution channels during the quarter.

By region, Europe led performance with reported revenue growth of 24% (10% organically), followed by Asia at 13% reported (12% organically) and the Americas at 9% reported (7% organically).

Regional operating income was mixed. Europe rose 26% to $129 million and Asia increased 22% to $70 million, while the Americas declined 4% to $163 million.

Margins under pressure from tariffs 

Adjusted EBIT increased 7% to $217.8 million, although the adjusted EBIT margin narrowed to 12.5% from 13.4% a year earlier. Operating margin also declined, falling to 11.4% from 12.5%.

Gross margin was 61.9%, down slightly from 62.1%, with tariffs representing the primary headwind. That pressure was partially offset by price increases and lower promotional activity.

Chief Financial & Growth Officer Harmit Singh said: "Our strategic transformation is translating into higher returns and more profitable growth, enabling us to convert more of our strong revenue growth into bottom-line profit."

As a result, Levi Strauss raised its fiscal 2026 revenue outlook. The company now expects reported revenue growth of 5.5-6.5%, up from its previous forecast of 5-6%, alongside organic revenue growth of 4.5-5.5%.

It expects gross margin to be roughly flat to slightly higher than the prior year and projects an adjusted EBIT margin of approximately 12%.

The outlook assumes that US tariffs on Chinese imports remain at 30% and tariffs on imports from the rest of the world remain at 20%, with no significant deterioration in macroeconomic conditions.

Levi Strauss & Co. also disclosed that Singh, its finance chief since 2013, will retire following a planned leadership transition.

Singh joined Levi Strauss as Chief Financial Officer in 2013 and assumed the expanded title of Chief Financial & Growth Officer in 2023. His responsibilities included global finance, IT, mergers and acquisitions, investor relations, strategic sourcing, and, more recently, franchise expansion and real estate. He played a key role in the company's 2019 IPO and its transition to a DTC-first business model.

Under a transition agreement dated 3 April 2026, Singh will remain in his role until a successor is appointed, with a deadline of 30 November 2026. He will then transition to the role of Special Advisor before formally leaving the company.

The business said it has engaged an executive search firm to help identify candidates.