Core Insights - Levi Strauss issued disappointing guidance for the current fiscal year, expecting sales to decline between 1% and 2%, contrary to estimates of 3.7% growth [1] - The company anticipates adjusted earnings per share to be between $1.20 and $1.25, below the expected $1.37 [1] Financial Performance - For the fiscal fourth quarter, Levi reported net income of $182.6 million, or 46 cents per share, compared to $126.8 million, or 32 cents per share, a year earlier [2] - Adjusted net income was $202 million, or 50 cents per share, up from $179 million, or 44 cents per share, a year earlier [2] - Sales rose to $1.84 billion, a 12% increase from $1.64 billion a year earlier, with organic sales growing 8% [3] Market Trends - Sales in the Americas grew 12%, Europe increased 15%, and Asia expanded 9% during the quarter [7] - Direct-to-consumer sales increased 19%, accounting for 45% of total organic net sales [7] - Wholesale revenues grew 7% during the quarter, despite softness in the industry [7] Strategic Initiatives - CEO Michelle Gass has focused on cutting underperforming business segments and enhancing profitability [4] - The company has launched a marketing partnership with Beyoncé, which has positively impacted demand across the business [5] - Women's apparel now constitutes about 36% of Levi's overall business, with a goal to increase this to 50% over time [5] Supply Chain and Tariff Concerns - Levi sources products from 25 countries, with less than 1% coming from China, minimizing exposure to proposed tariffs [10] - The company imports about 5% of products from Mexico and none from Canada, reducing tariff risk [10] - Levi plans to work with suppliers to minimize consumer price impacts if tariffs are implemented [11][12]

Financial Performance - Reported net revenues for Q4 2024 were $1.84 billion, an increase of 12% year-over-year, with organic net revenues up 8%[3] - For fiscal year 2024, reported net revenues were $6.4 billion, up 3% from FY 2023, with adjusted net income of $503 million, a 14% increase[9] - Net revenues for the three months ended December 1, 2024, were $1,839.7 million, an increase of 12.0% compared to $1,642.3 million for the same period in 2023[30] - Total net revenues for the twelve months ended December 1, 2024, were $6,355.3 million, a 2.9% increase from $6,179.0 million in the previous year[69] - Total net revenues for Levi's Brands increased by 12.2% to $1,716.1 million for the three months ended December 1, 2024, compared to $1,529.3 million for the same period in 2023[73] Earnings and Margins - Diluted EPS for Q4 2024 was $0.46, up from $0.32 in Q4 2023, while adjusted diluted EPS increased to $0.50 from $0.44[8] - Adjusted net income for the three months ended December 1, 2024, was $202.2 million, compared to $178.6 million in the prior year, reflecting a 13.5% increase[45] - Adjusted EBIT for the three months ended December 1, 2024, was $246.8 million, a 23.3% increase from $200.1 million in the same period in 2023[75] - The net income margin for the three months ended December 1, 2024, was 9.9%, an increase from 7.7% in the same period of 2023[45] - Adjusted EBIT for the twelve months ended December 1, 2024, was $649.9 million, up from $554.8 million in 2023, reflecting a 17.1% growth[39] Revenue Growth by Region - In the Americas, net revenues increased 12% on a reported basis and 9% on an organic basis, with the U.S. growing 6% organically[3] - Asia net revenues increased 9% on both a reported and organic basis, reflecting growth across channels[3] - Europe reported a 14.5% increase in revenues to $434.1 million for the three months ended December 1, 2024, compared to $379.0 million in the same period last year[69] - Direct-to-Consumer (DTC) organic net revenues rose by 13.7% to $789.2 million for the three months ended December 1, 2024, from $694.0 million in the previous year[71] Cost and Expenses - Gross margin rose 350 basis points to 61.3%, a company record, driven by lower product costs and higher full-price sales[8] - Selling, general and administrative expenses for the twelve months ended December 1, 2024, were $3,246.2 million, up from $3,051.9 million in 2023, reflecting a 6.4% increase[30] - The company reported a restructuring charge of $14.0 million for the three months ended December 1, 2024, compared to $1.0 million for the same period in 2023[30] - The company incurred $188.7 million in restructuring charges related to Project Fuel for the year ended December 1, 2024[56] Cash Flow and Assets - Net cash provided by operating activities increased significantly to $898.4 million, compared to $435.5 million in the previous year, marking an increase of approximately 106.5%[33] - Cash and cash equivalents increased to $690.0 million as of December 1, 2024, from $398.8 million as of November 26, 2023[27] - Total assets increased to $6,375.5 million as of December 1, 2024, from $6,053.6 million as of November 26, 2023[27] - The company reported a significant net change in operating assets and liabilities of $350.5 million for the year ended December 1, 2024, compared to a negative change of $108.5 million in the previous year[33] Impairments and Charges - The company incurred $116.9 million in goodwill and other intangible asset impairment for the year ended December 1, 2024, compared to $90.2 million in the prior year[33] - Goodwill and other intangible asset impairment charges for the year ended December 1, 2024, amounted to $117.9 million, with significant charges related to Beyond Yoga®[43] - Property, plant, equipment, and right-of-use asset impairment charges for the year ended December 1, 2024, included $11.1 million related to discontinued technology projects[41] Shareholder Returns - The company returned $289 million to shareholders in FY 2024, a 45% increase over the prior year, including dividends and share repurchases[11] - For the year ended December 1, 2024, adjusted diluted earnings per share was $1.25, up from $1.10 in 2023, representing a 13.6% increase[51] Strategic Initiatives - The company is evaluating strategic alternatives for the Dockers business, including potential sale or other transactions[82] - The divestiture of the Denizen brand resulted in a revenue decrease of $33.2 million for the year ended December 1, 2024[80] - The footwear divestiture contributed a revenue decrease of $63.2 million for the year ended December 1, 2024[80]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________ FORM 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 1, 2024 Commission file number: 001-06631 _____________________________ LEVI STRAUSS & CO. (Exact Name of Registrant as Specified in Its Charter) (State or ...

Levi Strauss (LEVI) ended the recent trading session at $18.40, demonstrating a +1.21% swing from the preceding day's closing price. This move outpaced the S&P 500's daily gain of 0.05%. At the same time, the Dow lost 0.17%, and the tech-heavy Nasdaq gained 0.4%.The jeans maker's stock has climbed by 6.94% in the past month, exceeding the Retail-Wholesale sector's gain of 6.79% and the S&P 500's gain of 5.75%.Analysts and investors alike will be keeping a close eye on the performance of Levi Strauss in its ...

Core Viewpoint - Levi Strauss & Co. has disappointed investors by lowering its guidance for the fiscal third-quarter of 2024, leading to an initial 8% sell-off in shares, despite some positive aspects in the earnings report that were overshadowed by the negative headline metrics [1]. Financial Performance - The company reported a 2-cent EPS beat over consensus estimates of 33 cents, but revenues rose only 0.4% YoY to $1.52 billion, falling short of the $1.55 billion consensus [3]. - Net revenues in the Americas fell by 1%, while Asia's net revenues were flat YoY [3]. - Dockers brand revenues plunged by 15% as reported and 13% in constant currency [3]. - Wholesale revenue declined by 6% YoY on a reported basis and 5% in constant currency [3]. Positive Aspects - Levi's brand sales grew by 5% YoY globally, marking the highest revenue growth in two years [4]. - The company achieved a record gross margin of 60%, up 440 bps YoY, driven by lower product costs and a favorable brand mix [4][6]. - Direct-to-consumer (DTC) sales rose by 12% YoY in the U.S. and 9% in Europe, contributing to the higher gross margin [6]. Regional Performance - The Americas experienced a 1% sales decline, primarily due to exiting the Denizen business, but would have seen a 2% YoY revenue increase without this exit [5]. - Europe showed a positive trend with net revenues climbing 6% on a reported basis and 7% in constant currency [5]. Strategic Considerations - The company is considering a strategic review of the Dockers brand due to its poor performance, which may lead to divestment [7]. - CEO Michelle Gass highlighted three areas of softness: Dockers, Mexico, and China, and mentioned plans to address these challenges [10]. Guidance and Future Outlook - Levi Strauss lowered its full-year 2024 revenue guidance to $6.24 billion from $6.32 billion, and adjusted EPS estimates to a tighter range of $1.17 to $1.27, below the $1.25 consensus [8]. - The average analyst price target for the stock is $22.75, with a high forecast of $26.00, indicating a potential upside of 15.75% [4][52].

Core Insights - Levi Strauss & Co's shares fell by 7.19% to $19.545 following disappointing third-quarter earnings that did not meet Wall Street expectations [1] - The company reported a 1% decrease in sales in the Americas, influenced by the exit from the Denizen® business and underperformance of the Dockers brand, leading to potential strategic options including a sale [2] - Full-year earnings per share (EPS) guidance and revenue growth forecast were adjusted downwards, with revenue growth now projected at approximately 1% year-over-year, reduced from 1% to 3% [3] Valuation Metrics - Levi's current Price-to-Earnings (P/E) ratio is 51.43, significantly higher than its forward P/E of 13.53, indicating high growth expectations [4] - The stock price exceeds its GF Value of $18.15, suggesting it may be fairly valued at this time [4] - The Price-to-Book (P/B) ratio stands at 4.15, indicating a premium investors are willing to pay relative to the company's book value [5] Financial Health - Despite the stock decline, Levi's market capitalization remains at $7.77 billion, with investors closely monitoring the company's strategic decisions and financial health [6] - The company shows some positive signs, such as an expanding operating margin, but faces challenges including financial stress and slowed revenue growth [5]

Core Insights - Levi Strauss & Co. has seen a significant decline in its stock price, dropping by 7.45% and falling below the $20 mark [1] - The company is considering the potential sale of its Dockers brand, indicating a strategic shift [1] - Levi Strauss has projected lower-than-expected operating revenue for the fourth quarter, suggesting potential challenges ahead [1]

Financial Data and Key Metrics Changes - In Q3 2024, net revenues increased by 2% in constant currency and 3% when excluding the Denizen business, reaching $1.5 billion [6][23] - Adjusted EBIT margins expanded by 250 basis points to 11.6%, with adjusted EBIT dollars increasing by 27% [20][25] - Gross profit for Q3 was $911 million, representing a record gross margin of 60%, an increase of 440 basis points year-over-year [24][26] Business Line Data and Key Metrics Changes - The Levi's brand grew by 5% globally in Q3, marking its best quarterly growth in two years, while Dockers underperformed, declining by 13% [6][39] - Direct-to-consumer (DTC) revenues increased by 12%, with U.S. DTC also up by 12% [15][27] - Beyond Yoga saw a growth of 19%, driven by strength in wholesale and e-commerce [18] Market Data and Key Metrics Changes - The Americas region saw a 2% increase in revenues, while Europe returned to growth with a 7% increase [27][28] - Asia's net revenues increased by 4%, with significant strength in markets like Turkey and Japan, although challenges persisted in China and the Middle East [28] - The women's business outperformed, with global growth of 4% in U.S. wholesale and 11% in DTC [61] Company Strategy and Development Direction - The company is focusing on a DTC-first strategy, narrowing its focus to the Levi's brand and Beyond Yoga, while evaluating strategic alternatives for Dockers [7][39] - The overarching strategy aims to transition from a denim bottoms brand to a head-to-toe denim lifestyle brand, with significant growth in dresses and skirts [13] - A new global marketing campaign featuring Beyoncé is expected to enhance brand visibility and drive sales [11][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term potential of the Levi's brand, despite challenges in China and Dockers [8][29] - The company anticipates mid-single-digit revenue growth for Q4, driven by strong momentum in the Levi's brand and DTC channels [29][30] - Management highlighted the importance of maintaining profitability and cash flow discipline, with expectations for continued margin expansion [20][21] Other Important Information - The company returned $69 million to shareholders in Q3, including $52 million in dividends and $18 million in share repurchases [26] - Inventory levels were down 7%, with a healthy composition expected to end the year lower than the previous year [26] Q&A Session Summary Question: Can you talk about the drivers of this quarter's revenue miss and your confidence in Q4 acceleration? - Management identified foreign exchange impacts, particularly from the Mexican peso, and underperformance in Mexico and Dockers as key factors for the revenue miss, but expressed confidence in Q4 acceleration due to strong momentum in the U.S. and Europe [35][36] Question: Can you elaborate on the rationale for the Dockers evaluation? - The decision to explore strategic options for Dockers is aimed at focusing on the Levi's brand and Beyond Yoga, as Dockers has underperformed for some time [39][40] Question: What are the drivers of the 5% global growth for the Levi's brand? - The growth is driven by strong DTC performance, with 12% growth globally, and a focus on women's business, which has gained significant market share [42][45] Question: How should we think about gross margin expansion moving forward? - Management reiterated the goal of growing gross profit dollars faster than SG&A, maintaining a long-term expectation of 30 to 40 basis points of annual gross margin expansion [46][47]

Core Insights - Levi Strauss reported revenue of $1.52 billion for the quarter ended August 2024, reflecting a year-over-year increase of 0.4% [1] - The company's EPS was $0.33, up from $0.28 in the same quarter last year, indicating a positive earnings surprise of +6.45% [1] - Revenue fell short of the Zacks Consensus Estimate of $1.55 billion, resulting in a surprise of -2.25% [1] Revenue Breakdown - Geographic Revenues in the Americas were $757.20 million, down -1.2% year-over-year and below the estimated $788.87 million [3] - Geographic Revenues in Europe reached $406.60 million, up +5.9% year-over-year and exceeding the estimated $393.20 million [3] - Geographic Revenues from Other Brands were $105.90 million, down -6.9% year-over-year and below the estimated $117.63 million [3] - Geographic Revenues in Asia totaled $247.10 million, reflecting a slight increase of +0.2% year-over-year, but also below the estimated $252.10 million [3] Stock Performance - Shares of Levi Strauss have returned +12.9% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [4] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [4]

Financial Performance - Levi Strauss reported quarterly earnings of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.31 per share, and up from $0.28 per share a year ago, representing an earnings surprise of 6.45% [1] - The company posted revenues of $1.52 billion for the quarter ended August 2024, which missed the Zacks Consensus Estimate by 2.25%, and is slightly up from $1.51 billion year-over-year [2] - Over the last four quarters, Levi Strauss has surpassed consensus EPS estimates four times but has only topped revenue estimates once [2] Stock Performance - Levi Strauss shares have increased approximately 31.1% since the beginning of the year, outperforming the S&P 500's gain of 19.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.51 on revenues of $1.76 billion, and for the current fiscal year, it is $1.24 on revenues of $6.31 billion [7] Industry Outlook - The Retail - Apparel and Shoes industry, to which Levi Strauss belongs, is currently ranked in the top 41% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The performance of Levi Strauss may be influenced by the overall industry outlook, as empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions [5][8]