Levi Strauss Raises 2026 Outlook After Q2 Earnings Beat, Shares Drop Despite Strong Results

Levi Strauss & Co. (NYSE: LEVI) raised its full-year fiscal 2026 guidance after reporting second-quarter earnings and revenue that topped Wall Street expectations, although the apparel maker's shares fell more than 6% in premarket trading.

For the quarter ended May 31, Levi Strauss posted adjusted earnings of $0.28 per share, beating analysts' estimate of $0.24. Revenue climbed 8% year over year to $1.56 billion, exceeding the consensus forecast of $1.52 billion and up from $1.45 billion a year earlier.

The company increased its full-year adjusted earnings per share forecast to $1.46-$1.52, up from the previous $1.42-$1.48 range. However, the midpoint of $1.49 came in slightly below analysts' consensus estimate of $1.51. Levi Strauss also lifted its annual revenue growth outlook to 7.0%-7.5%, compared with its earlier projection of 5.5%-6.5%, exceeding expectations for 6.6% growth.

President and CEO Michelle Gass said the Levi's brand continues to strengthen its connection with consumers globally, with second-quarter results reflecting successful execution across key growth initiatives. Chief Financial and Growth Officer Harmit Singh added that strong first-half performance enabled the company to pass through its second-quarter earnings beat while raising its full-year guidance.

Organic net revenue increased 6% during the quarter. Direct-to-consumer sales rose 8%, while comparable store sales gained 6%. Regionally, organic revenue grew 7% in the Americas and 12% in Asia, while Europe recorded a 1%decline.

Profitability also improved, with operating margin expanding to 7.8% from 7.5% a year earlier and adjusted EBIT margin rising to 9.0% from 8.3%.

Jefferies analysts maintained a bullish stance, citing broad-based sales growth, resilient demand, strong free cash flow, and attractive valuation. BTIG analysts also praised Levi's accelerating revenue and margin performance, arguing the company deserves to trade above its historical valuation multiple.

Levi Strauss also announced a 14% increase in its quarterly dividend to $0.16 per share. Separately, the company generated significant brand visibility during the 2026 FIFA World Cup by transforming FIFA's requirement to cover the Levi's Stadium logo into a viral global marketing campaign across social media and flagship stores.