Levi Strauss raises full-year profit outlook despite revenue miss
The beat comes as CFO Harmit Singh steps back and John Vandemore takes over the finance role on November 1
Published
Levi Strauss reported third-quarter earnings of $0.48 a share, $0.12 above expectations. Revenue came in at $1.61bn, short of the $1.65bn forecast.
The company raised its full-year 2026 guidance. Adjusted diluted earnings per share are now expected at $1.54 to $1.56, up from $1.46 to $1.52. Reported net revenue growth is now put at approximately 7.0%, narrowed from a prior range of 7.0% to 7.5%. Organic net revenue growth guidance rose to approximately 6.0%. Gross margin is now expected to increase by 130 basis points versus the prior year, up from a prior outlook of 10 basis points, and adjusted EBIT margin guidance rose to approximately 12.1%, 70 basis points higher than last year.
Levi Strauss declared a quarterly dividend of $0.16 a share, up 14% from a year ago, payable November 4. It also plans to enter a $100m accelerated share repurchase program.
President and CEO Michelle Gass said the direct-to-consumer business fell short of internal expectations but is on track for mid-single-digit growth in the fourth quarter. The revenue miss and that soft direct-to-consumer performance come as Levi Strauss tightens its margin and earnings guidance for the second straight quarter, betting that the fourth quarter closes the gap. The raised outlook also arrives alongside a change at the top of the finance department, with Harmit Singh stepping back as CFO and John Vandemore taking over on November 1. The size of the buyback and the dividend increase suggest the company sees the incoming finance chief inheriting a business with improving margins rather than one that needs repair.