Levi’s Boosts Earnings Outlook Amid Tariff Challenges

San Francisco, CA — Levi Strauss & Co. has raised its earnings outlook as the iconic denim maker reported better-than-expected financial results for the second quarter. The company announced its anticipated earnings per share (EPS) will be between $1.25 and $1.30, a significant increase from previous projections of $1.20 to $1.25.

The announcements came alongside reports that Levi’s pulled in $1.45 billion in sales for the quarter ending June 1, marking a 6% increase from the same period last year. The reported EPS of 22 cents also outperformed analyst expectations of 13 cents.

Harmit Singh, Levi’s finance chief, stated during a conference call that the company is committed to absorbing a portion of the costs related to tariffs without passing on the expense to consumers. Currently, Levi’s anticipates that tariff impacts will range from $25 million to $30 million for the rest of the fiscal year, translating to an approximate 2 to 3 cents impact on EPS.

“We are doing our part. We are absorbing some of the costs. What helps is that our business is so strong,” said CEO Michelle Gass, emphasizing the company’s adaptability amidst rising tariffs.

Levi’s major sourcing locations include countries like Pakistan, Bangladesh, and Indonesia, which have been under scrutiny in the current trade climate. Approximately 60% of Levi’s business is conducted outside of the U.S., and about 1% of its products are manufactured in China.

Despite potential challenges from tariffs, Levi’s has reported three consecutive quarters of high single-digit growth, suggesting a resilient consumer base. “The consumer is generally resilient and a continued fan of the brand,” Singh added.

Levi’s also reported record gross margins of 62.6% driven by fewer markdowns, lower product costs, and increased direct sales, particularly in women’s apparel, where sales grew by 14%.

The company is also exploring partnerships to enhance its market presence. A recent collaboration with Beyoncé has generated significant interest, while a new collection with Nike is set to debut on Levi’s online platform.

As Levi’s continues to navigate a volatile market environment, the strong demand for its products, particularly unique women’s clothing lines, suggests that the retailer remains a top contender in the apparel industry.