Levi Strauss' Q3 Earnings Beat Estimates, DTC Sales Up 11.3% Y/Y

Core Insights - Levi Strauss & Co. reported strong third-quarter fiscal 2025 results, with earnings per share (EPS) and revenues exceeding expectations, showing year-over-year improvement [1][2] Financial Performance - Adjusted EPS for the quarter was 34 cents, surpassing the Zacks Consensus Estimate of 31 cents, and increased nearly 3% from 33 cents in the prior year [2] - Net revenues reached $1.54 billion, exceeding the Zacks Consensus Estimate of $1.50 billion, and grew nearly 7% year over year [2] - DTC net revenues increased by 11.3% to $711.2 million, with organic growth driven by a 7% rise in the U.S., 4% in Europe, and 14% in Asia [4] - E-commerce revenues rose 18% on a reported basis and 16% organically [4] - Wholesale net revenues grew 3.5% to $832.2 million, with a 5.3% organic increase [5] Regional Performance - In the Americas, revenues increased 6% on a reported basis and 7% organically, with the U.S. showing a 3% organic growth [6] - European revenues grew 5% reported and 3% organically, driven by strong performance in the UK [7] - Asian revenues rose 12% both reported and organically, with double-digit growth in DTC and wholesale [7] Margins and Expenses - Gross profit increased 8.9% year over year to $951.6 million, with gross margin expanding by 110 basis points to 61.7% [8] - Adjusted SG&A expenses rose 10.5% to $769.3 million, with a percentage of revenues decreasing by 160 basis points to 49.8% [8] Shareholder Returns - The company returned nearly $151 million to shareholders, a 118% increase year over year, including $55 million in dividends [11] - An accelerated share repurchase program of $120 million was launched, retiring about 5 million shares [11] Future Outlook - For fiscal 2025, the company expects reported net revenue growth of about 3%, up from a previous forecast of 1-2% [15] - Organic net revenue growth is projected at around 6%, an increase from the earlier estimate of 4.5-5.5% [15] - The gross margin is anticipated to rise by 100 basis points, with adjusted EPS expected to be in the range of $1.27-$1.32 [15]