Levi Strauss Reports Record Q2 Margins

Levi Strauss & Co. 15%) reported fiscal 2025 second-quarter earnings on July 10, 2025, posting 9% organic net revenue growth, a record gross margin of 62. 6%, and adjusted diluted EPS up 37% year over year to $0

The ing analysis details the most meaningful strategic and financial developments for long-term investors

The Move to DTC-First Accelerates Margin and Growth fileLevi’s DTC revenue now accounts for over half of total revenue, with e-commerce comps up by double-digit percentages, while the company dered its 13th consecutive quarter of positive comparable sales growth

DTC EBIT margins rose apximately 300 basis points year over year, driven by higher revenue ductivity and imved cost management. "We are fundamentally becoming a company with a higher growth rate higher margin file, stronger cash flows, higher returns on invested capital, and a higher percentage of DDC [Dorsten Distribution Center]. "— Harmit Singh, Chief Financial and Growth OfficerThis operating model shift structurally increases fitability and reduces dependence on wholesale volatility, giving Levi greater pricing power, richer consumer data, and the ability to capture a greater of the value chain

Unaided brand awareness scores rose significantly year over year in core, and the company drove demand through amplified cultural partnerships with entertainers Beyoncé and collaborations with brands Nike

SKU rationalization and a reset of the tops enabled a globally directed asment of more than 30% for the first half of FY2025, which imved full-price sell-through. "We continue to maintain our global top market position and then our No. 1 position here in the U

For men and women. "— Michelle Gass, President and CEOThe combination of iconic brand strength and disciplined duct innovation expands Levi’s addressable market

Furthermore, Levi’s dered an 18% return on invested capital and announced an 8% dividend increase, while planning at least $100 million in buybacks from the ceeds of the Dockers sale

Inventory rose 15% as a active measure to support holiday sales and manage supply chain risk from tariff uncertainty and Red Sea shipping disruptions. "After mitigation, we expect the net impact of tariffs to be 20 basis points headwind to our full-year gross margin or apximately a 40 basis points impact in the second half. "— Harmit Singh, Chief Financial and Growth OfficerLevi’s demonstrated management discipline in navigating external shocks, preserving margin expansion while reinforcing holder returns, and enhancing its competitive resilience through active risk mitigation and capital allocation

Full-year adjusted EBIT margin is anticipated at 11

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