Revenues of Levi Strauss & Co’s rose by 6 per cent on a reported basis and 9 per cent on an organic basis to $1.4 billion in In Q2, FY25. This growth was spearheaded by the core Levi's brand with a 9 per cent global organic increase, seeing particularly strong performance in the US and Europe, along with positive contributions from the Beyond Yoga brand.

The company celebrated its 13th consecutive quarter of global DTC comparable sales growth, with DTC revenue increasing by 11 per cent on a reported basis and 10 per cent organically. Its e-commerce revenues also expanded by 13 per cent, strengthening DTC's position as a cornerstone of the business, now accounting for 50 per cent of total net revenues. Wholesale net revenues also saw healthy increases, up 3 per cent reported and 7 per cent organically.

Geographically, the Americas region recorded 5 per cent reported and 9 per cent organic revenue growth, with the US alone seeing a 7 per cent organic increase. Europe emerged as a standout market, achieving impressive 14 per cent reported and 15 per cent organic growth. Revenues in Asia, however, remained flat.

Profitability metrics soared, with Levi's gross margin reaching a record 62.6 per cent, an increase of 140 basis points Y-o-Y. This expansion was primarily attributed to lower product costs and a favorable channel mix. The company’s operating margin significantly improved to 7.5 per cent from 1.5 per cent in Q2 2024, and adjusted EBIT margin rose by 190 basis points to 8.3 per cent.

The yet another strong quarter results delivered by the company reflects its broad-based strength across the board - clear evidence that its strategic agenda is gaining traction, states Michelle Gass, President and CEO of Levi Strauss & Co. It aims to transform into a denim lifestyle brand and best-in-class DTC retailer becomes our reality, he adds.

Despite factoring in higher US tariffs (30 per cent on China imports and 10 per cent on rest-of-world imports), the company raised its full-year guidance. Reported net revenue growth is now projected at 1 per cent to 2 pre cent while organic growth is expected to be between 4.5 per cent and 5.5 per cent Adjusted diluted EPS is now forecast between $1.25 and $1.30, up from the prior range of $1.20 to $1.25. Gross margin expansion is anticipated at 80 basis points, slightly adjusted due to a 20 basis point tariff impact.

Harmit Singh, Chief Financial and Growth Officer, emphasizes, the continued inflection of the company’s financial performance is a direct result of its focus on the core Levi's brand and DTC-first strategy. Levi’s is slowly a company with a higher growth rate, higher margin profile, stronger cash flows and higher returns on invested capital. The positive outlook assumes no major deterioration in macroeconomic conditions, inflation, or additional supply chain disruptions, he adds.