Key facts
- Levi Strauss raised its annual profit forecast.
- The company received $79 million in tariff refunds in the third quarter.
- Levi Strauss plans to redeploy about $60 million this year on promotions and marketing.
- Comparable sales for its direct-to-consumer business were flat in the third quarter.
- Levi's raised its outlook for annual organic revenue growth to 6%.
- Net revenue for the quarter ended August 30 rose 4% to $1.61 billion.
Levi Strauss & Co. raised its annual profit forecast on Wednesday, benefiting from tariff refunds and anticipating strong holiday demand for its premium denim.
The apparel company received $79 million in refunds during the third quarter ended August 30 for tariffs paid under the International Emergency Economic Powers Act. Levi Strauss plans to use about $60 million of these refunds this year for promotions and marketing.
Despite these benefits, comparable sales for the company's direct-to-consumer business were flat in the third quarter. CEO Michelle Gass noted that the business fell short of expectations, with sales declining in the U.S. as consumers faced higher inflation.
However, the company's women's line has shown strength, driven by demand for baggy jeans and an expansion into tops, skirts, and dresses beyond denim. Levi's also increased its outlook for annual organic revenue growth to 6%, the upper end of its previous 5.5% to 6% forecast.
For the third quarter, net revenue rose 4% to $1.61 billion, largely in line with analysts' expectations. Adjusted earnings per share came in at 48 cents, exceeding the estimated 36 cents per share. The company's shares have declined about 5% year-to-date.