LEVI STRAUSS & CO Q1 FY2026 earnings call

• Brand-led: Levi's brand was up 9% for the quarter. Launched new global campaign 'Behind Every Original' during Super Bowl, with strong awareness and media impressions. Announced multi-year global partnership with Rosie. Harry Styles wearing Levi's on album cover and BRIT Awards.
• Product: Bottoms up 7%, with innovation in fabrics, fits, finishes. Core Bottoms like 501s had growth. Fashion forward fits in women's and men's. Tops an important growth driver, with men's polos, button downs, quarter zips and women's woven blouses, sweaters performing well. Shifted to more globally directive assortment in DTC business, increasing product commonality to nearly 50%. Blue tab delivered robust growth.
• DTC-first retailer: Global direct-to-consumer business up 10% in Q1, comp sales up 7% for 16th consecutive quarter. E-commerce delivered 17% growth. Loyalty program reached 46 million members globally, up 17% year over year.
• International markets: International markets up 12%. Europe grew 10% with strength across markets. Signature grew 16%. Beyond Yoga up 23%.

Americas net revenues were up 7%, driven by 4% growth in the US and 14% growth in LATAM. Europe grew 10% in Q1. Asia grew 12%. Global direct-to-consumer business delivered double-digit growth, up 10% in Q1. Comparable sales were up 7% this quarter. Wholesale channel grew 8%. Women's accounted for approximately 55% of total growth. TOPS drove roughly a third of our growth in this quarter. By region, international business contributed to about 75% of growth.

2026 is off to a strong start. Raising outlook across revenue, margin, and earnings. For full year, reported and organic net revenue growth raised by half a point. Reported growth to be up 5.5% to 6.5% and organic revenue to be up 4.5% to 5.5%. Gross margin now expected to be flat to slightly up. Adjusted EBIT margin now expected to be approximately 12% up from previous expectation. Adjusted diluted EPS now expected to be approximately $1.42 to $1.48 up from $1.40 to $1.46. For quarter two, expected reported revenues to be up 4% to 5% for the quarter and organic up 3% to 4%. Gross margin expected to be slightly down due to unfavorable foreign exchange. Adjusted EBIT margin expected to be in the range of 8% to 9%.

Q: Laurent Vasilescu of BNP Paribas asked about what's driving the momentum and SG&A.

A: Michelle said they're pleased with strong start, growth broad-based, linked to strategies. Harmeet said SG&A as a percentage of revenue was a little over 49%, expect mid to high 49% by end of year.

Q: Oliver Chen of TD Cohen asked about guidance being conservative and wholesale momentum.

A: Harmeet said early in year, prudent outlook, only other thing is not incorporating tariff reduction. Michelle said denim category healthy, loyalty, AI, e-commerce up.

Q: Ike Moruchow of Wells Fargo asked about Europe commentary and DC.

A: Harmeet said about $30 million moved from 1Q to 2Q in wholesale, DC transition stabilizing, distribution costs scaling down.

Q: Jay Soul of UBS asked about US and Super Bowl.

A: Michelle said pleased with US start, strong execution in DTC and wholesale, Super Bowl launch of campaign was successful.

Q: Brooke Roach of Goldman Sachs asked about pricing and markdowns.

A: Harmeet said thoughtful on pricing, monitoring consumer response, no impact on demand yet.

Q: Bob Durbel of VTIG asked about ocean freight and cotton.

A: Harmeet said locked through end of year on base ocean and air freight rates, product costs driven by rationalizing SKUs, etc.

Q: Rick Patel's representative asked about organic revenue growth split.

A: Harmeet said even balance between units and AURs, expanding addressable market.

Q: Paul of Citi asked about monthly basis and region trends.

A: Harmeet said quarter-related trends positive, no apparent change in macro view by region.

Q: Adrian Yee of Barclays asked about international growth and go-to-market.

A: Harmeet said different regions have different mix of DTC and wholesale, Asia has most new stores opening.