Levi Strauss & Co. (NYSE: LEVI) released its first-quarter financial results for the period ending March 2, 2025, showcasing strong performance that surpassed market expectations. The company reported net revenues of $1.5 billion, marking a 3% increase on a reported basis and a remarkable 9% growth on an organic basis compared to the same quarter in 2024.

1. Key Highlights

Operating Margin: The operating margin stood at 12.5%, a significant improvement from the previous year's meager 0.04%. Adjusted EBIT margin surged by 400 basis points to 13.4%, reflecting the company's enhanced operational efficiency.

Earnings Growth: Continuing operations yielded a diluted earnings per share (EPS) of $0.35, a notable recovery from a loss of $0.03 in Q1 2024. Adjusted diluted EPS rose 52% year-over-year to $0.38.

Reclassification of Dockers®: Notably, the Dockers® brand has been reclassified as discontinued operations in Q1, impacting the reported figures.

2. Regional Performance Breakdown

The performance varied across different regions:

Americas: Revenues increased by 6% on a reported basis and 11% organically, with the U.S. market alone showing an 8% organic growth.

Europe: The region experienced a 5% decline in reported revenues; however, organic revenues grew by 3%, indicating resilience in the market.

Asia: Revenues rose 7% on a reported basis and 10% organically, reflecting strong demand in the region.

Beyond Yoga®: This segment achieved a 10% increase in revenues, both reported and organic, showcasing its growing popularity.

Direct-to-Consumer (DTC): DTC revenues jumped by 9% on a reported basis and 12% organically, with e-commerce growth at 13% reported and 16% organic.

3. Financial Metrics and Operational Efficiency

Levi Strauss also highlighted a significant improvement in its gross margin, which rose to 62.1%, an increase of 330 basis points from the previous year. This was attributed to lower product costs and a favorable mix of channels and brands.

Selling, General, and Administrative (SG&A) Expenses: SG&A expenses totaled $749 million, down from $756 million in Q1 2024. Adjusted SG&A increased by 1.7% to $744 million, representing 48.7% of sales.

Restructuring Charges: The company incurred $7 million in restructuring charges related to Project Fuel, underscoring its commitment to operational efficiency.

4. Shareholder Returns and Future Outlook

In the first quarter, Levi Strauss returned approximately $81 million to shareholders, a 12% increase year-over-year. This included dividends totaling $51 million and share repurchases of $30 million, equating to 1.6 million shares retired. The company has a remaining $560 million under its current share repurchase authorization.

Michelle Gass, President and CEO, expressed confidence in the company's momentum, stating, “We exceeded revenue and profitability expectations in Q1 marking a strong start to the year, another proof point that our transformation strategy is working.”

Looking ahead, Levi Strauss maintains its fiscal 2025 guidance, which excludes the impact of recent tariff announcements. The company anticipates continued growth and stability, bolstered by its strong balance sheet and agile supply chain.

5. Fiscal 2025 Guidance

The company’s projections for fiscal 2025 remain unchanged, signaling confidence amid economic uncertainties:

Organic Net Revenue Growth: Expected between 3.5% and 4.5%.

Reported Net Revenue Decline: Anticipated between (1%) to (2%).

Gross Margin Expansion: Expected to expand by 100 basis points to approximately 61.6%.

Adjusted EBIT Margin: Forecasted to expand to between 11.4% and 11.6%.

Levi Strauss & Co. continues to adapt to market pressures while focusing on strategic growth initiatives, ensuring its place as a leader in the apparel industry.

Original press release