Financial Data and Key Metrics Changes - In Q2 2025, the company achieved a revenue growth of 26% to $509 million, generated adjusted EBITDA of $122 million, and free cash flow of $99 million, surpassing the entire free cash flow delivered in 2023 [4][30] - The adjusted diluted earnings per share for Q2 was $0.92, exceeding the guidance of $0.85 to $0.89 [29] - Gross margin expanded to 72.3%, exceeding guidance of 70.5% [28] Business Line Data and Key Metrics Changes - The company reported double-digit online growth in both its brands, Il Makiage and Spoiled Child, with Il Makiage expected to reach $1 billion in revenue by 2028 [12][24] - Spoiled Child is projected to cross $200 million in revenue this year, having launched only three years ago [13][42] Market Data and Key Metrics Changes - International sales represented approximately 15% of total net revenue, with a growth of over 40% in the first half of 2025, amounting to around $85 million [25][62] - The company is focusing on expanding its international presence, particularly in markets like the UK, Germany, Canada, Australia, and Israel, where it aims to replicate its U.S. success [27][62] Company Strategy and Development Direction - The company aims to become one of the largest beauty companies globally, with a focus on expanding its product offerings into healthcare, starting with dermatology [5][15] - Investments are being made in technology and new brands, with a strong emphasis on innovation and consumer demand for high-efficacy products [8][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving another record-breaking year in 2025, with expected net revenue between $799 million and $804 million, representing a year-over-year growth of 23% to 24% [32] - The company plans to front-load investments in 2026, which may impact EBITDA margins in the first half of the year but is expected to maintain a long-term growth algorithm of 20% revenue growth and 20% adjusted EBITDA margin [34] Other Important Information - The company successfully issued its first convertible exchangeable note, upsized to $600 million, which significantly increased its cash position to $815 million [31] - The company is preparing for the launch of Brand Three, which will enter the medical-grade space, focusing on dermatology and offering both OTC and prescription products [13][15] Q&A Session Summary Question: What is driving the sequential compression in gross margin for Q3? - Management explained that gross margin is not a primary metric managed by teams, who focus on contribution margin, and that seasonality and lower revenue dollars in Q3 and Q4 contribute to the compression [39][40] Question: Will the company constrain growth on existing brands to manage future growth? - Management confirmed that they often constrain growth to ensure sustainable long-term growth, maintaining a commitment to 20% revenue growth and 20% adjusted EBITDA margin [51][52] Question: What are the investment plans for Brand Three and expected returns? - Management indicated that significant investments are being made in new brands and technology, with expectations of substantial future returns similar to past successful launches [56][57] Question: What are the growth drivers for international markets? - Management highlighted that international markets could be as large as the U.S. business, with strong growth in established markets and potential in new testing markets [62] Question: How will the go-to-market strategy differ for Brand Three? - Management stated that while the strategy will leverage existing technology and user base, it will also incorporate personalized treatments developed over two years [71][72] Question: What long-term revenue streams are anticipated from Brand Three? - Management outlined that Brand Three will operate as a telehealth platform with medical-grade products, focusing on compliance and leveraging existing user data for product development [78][80]

Financial Performance - Levi Strauss reported a phenomenal quarter with 9% organic sales growth, exceeding estimates [1][3] - The company's earnings beat expectations by $0.13 [1] - Management raised the full-year forecast despite tariff impacts [2] - The company is aiming to become a $10 billion stronger, more profitable entity [5] Strategic Initiatives - Levi Strauss is pivoting to become DTC (Direct-to-Consumer) first and a head-to-toe lifestyle retailer rooted in denim [4] - The company is focusing and rationalizing SKUs (Stock Keeping Units), which are down in the mid-teens [7][8] - Driving for more commonality in assortment globally, increasing from single digits to approximately 30%, creating supply chain efficiencies [8] Market Performance - International business is up 10%, with women's outperforming with double-digit growth [5] - Tops business, a key part of lifestyle expansion, is up 16% [6] - European numbers show incredible organic growth of 14% to 15% [9] Tariff Impact & Mitigation - The company has assumed tariffs of 30% from China and 10% from the rest of the world in its guidance [19] - The net impact of tariffs is estimated to be around 20 basis points, or a couple of pennies on EPS [19] - Mitigation strategies include leveraging long-standing vendor relationships, increasing volume, modest surgical pricing, and full-price selling [19][20] Brand & Marketing - Focuses on social media, music, and sports to drive relevancy with younger consumers [13] - Collaborations with brands like Nike and designers like Sakai are driving brand heat [15][16]

Financial Performance - Levi Strauss adjusted earnings per share beat expectations by 22 cents [1] - Levi Strauss revenues exceeded expectations at 145 billion dollars [1] - Operating margin reached 75%, surpassing the street's expectation of 6% [2] - Gross margin slightly exceeded analyst expectations at 626% [2] Business Strategy & Growth - Direct-to-consumer revenues increased by 11%, now accounting for 50% of net revenues [2] - Wholesale revenues increased by 3% [3] Future Outlook - The company is raising its full-year top and bottom-line guidance, incorporating the impact of tariffs [3] - The company assumes tariffs will remain at approximately 30% on China and 10% for the rest of the world [3] - The company is raising its dividend to 14 cents per share [3] Market Reaction - Shares are moving higher by almost 85% in response to Levi's results [3]