Levi Strauss | 8-K: FY2026 Q2 Revenue Beats Estimate at USD 1.562 B

Revenue: As of FY2026 Q2, the actual value is USD 1.562 B, beating the estimate of USD 1.519 B.

EPS: As of FY2026 Q2, the actual value is USD 0.24, missing the estimate of USD 0.2431.

EBIT: As of FY2026 Q2, the actual value is USD 135.1 M.

Net Revenues

Total Net Revenues for the second quarter of 2026 were $1.6 billion, marking an 8% increase on a reported basis and a 6% increase on an organic basis compared to the second quarter of 2025. For the six months ended May 31, 2026, total net revenues were $3.305 billion, an 11% increase on a reported basis and an 8% increase on an organic basis compared to the prior year period.

By Region (Q2 2026 vs Q2 2025):

Americas net revenues increased 9% on a reported basis to $815 million and 7% on an organic basis, with the U.S. increasing 5% on a reported basis within the Americas.
Europe net revenues increased 4% on a reported basis to $420 million but decreased -1% on an organic basis, primarily due to a distribution center transition in the prior year. For the first half of 2026, Europe net revenues increased 14% on a reported basis and 5% on an organic basis.
Asia net revenues increased 10% on a reported basis to $284 million and 12% on an organic basis.

By Brand (Q2 2026 vs Q2 2025):

Beyond Yoga® net revenues increased 16% on both a reported and organic basis to $43 million.
Levi’s® Brands net revenues increased 7.8% on a reported basis to $1.5194 billion and 5.5% on an organic basis.
Levi’s® brand net revenues increased 8.1% on a reported basis to $1.4621 billion and 5.6% on an organic basis.
Levi Strauss Signature™ net revenues increased 1.6% on a reported basis to $57.3 million and 1.2% on an organic basis.

By Channel (Q2 2026 vs Q2 2025):

Direct-to-Consumer (DTC) net revenues increased 11% on a reported basis to $793.6 million and 8% on an organic basis.
DTC growth reflected a 5% increase in the U.S., a 12% increase in Europe, and a 12% increase in Asia on a reported basis.
Net revenues from e-commerce grew 19% on a reported basis and 17% on an organic basis.
DTC comprised 51% of total net revenues in the second quarter.
Wholesale net revenues increased 5% on a reported basis to $768.4 million and 3% on an organic basis.

Operating Income

Americas operating income was $164 million, up 7% from $153 million in Q2 2025.
Europe operating income was $89 million, up 28% from $69 million in Q2 2025.
Asia operating income was $43 million, up 44% from $30 million in Q2 2025.
Beyond Yoga® operating income was - $2 million, compared to - $4 million in Q2 2025, representing a 47% increase.

Operational Metrics

Operating margin was 7.8% in Q2 2026, up from 7.5% in Q2 2025.
Adjusted EBIT margin was 9.0% in Q2 2026, up from 8.3% in Q2 2025.
Gross margin expanded 10 basis points to 62.7%, driven by lower product costs and pricing actions.
Selling, general and administrative expenses (SG&A) were $843 million in Q2 2026, compared to $791 million in Q2 2025.
Adjusted SG&A was $838 million, up 6.5% compared to $787 million last year.
Interest and other income (expense), net, was $0 in Q2 2026, compared to expenses of - $6 million in Q2 2025.
The effective income tax rate was 22.4%, compared to 22.3% in Q2 2025.
Net income from continuing operations was $95 million in Q2 2026, compared to $80 million in Q2 2025.
Adjusted net income was $110 million in Q2 2026, compared to $89 million in Q2 2025.
Net loss from discontinued operations, net of taxes, was - $7.5 million in Q2 2026, compared to - $12.6 million in Q2 2025.
Net income was $87.3 million in Q2 2026, compared to $67.0 million in Q2 2025.
DTC comparable sales growth was 6% in Q2 2026.

Balance Sheet

Cash and cash equivalents were $849 million as of May 31, 2026.
Total liquidity was approximately $1.8 billion as of May 31, 2026.
Total inventories decreased 7% on a dollar basis compared to Q2 2025.

Cash Flow (Six Months Ended May 31, 2026 vs June 1, 2025)

Net cash provided by operating activities was $482.3 million, compared to $238.0 million in the prior year period.
Purchases of property, plant and equipment were - $99.3 million, compared to - $106.1 million in the prior year period.
Adjusted free cash flow was $383.0 million, compared to $131.9 million in the prior year period.

Shareholder Returns

In the second quarter, Levi Strauss & Co. returned $53.9 million in dividends to shareholders, representing a $0.14 per share dividend and a 5% increase over the prior year.
The company declared a dividend of $0.16 per share, a 14% increase over the prior year, totaling approximately $62 million, payable on August 5, 2026.
As of May 31, 2026, the company had $240 million remaining under its current share repurchase authorization.

Fiscal 2026 Guidance

Levi Strauss & Co. raised its full-year 2026 reported net revenues growth outlook to 7.0% to 7.5% and organic net revenues growth to 5.5% to 6.0%. The company expects gross margin to be up 10 basis points to the prior year and adjusted EBIT margin to expand to 12%. Adjusted diluted EPS is raised to $1.46 to $1.52, which includes an approximate - $0.04 headwind from a higher tax rate, with the tax rate expected to be approximately 23%.