Financial Data and Key Metrics Changes - In Q3, the company achieved a net revenue growth of 7%, with international markets contributing approximately 75% of this growth and the U.S. contributing 25% [17][18] - Gross margin reached a record 61.7%, expanding 110 basis points year-over-year, despite an 80 basis point headwind from tariffs [19][20] - Adjusted EBIT margin was 11.8%, with adjusted diluted EPS at $0.34, both exceeding expectations and reflecting a year-to-date growth of approximately 25% [21][28] Business Line Data and Key Metrics Changes - Direct-to-consumer (DTC) sales increased by 9%, with a strong performance in both stores and online, while wholesale net revenues grew by 5% [11][13] - Women's business grew by 12% year-to-date, while men's business saw a solid growth of 5% in Q3 [9][10] - The tops category experienced notable growth, with overall tops up 9% for the quarter and 10% year-to-date [82] Market Data and Key Metrics Changes - The U.S. market grew by 3%, while international business saw a 9% increase, driven by strong performance in Asia [6][14] - In Europe, net revenues were up 3%, with key markets like the U.K. showing high mid-teen growth [22][33] - Asia's net revenues accelerated to a 12% increase, with double-digit growth in both DTC and wholesale channels [22][23] Company Strategy and Development Direction - The company is pivoting to a DTC-first strategy, focusing on becoming a head-to-toe denim lifestyle retailer, which is expected to drive growth [5][7] - Continued investment in impactful marketing campaigns and strategic partnerships is aimed at enhancing brand relevance and expanding market share [6][8] - The company is also focusing on premiumization efforts, with the rollout of the elevated Blue Tab collection [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum, citing a strong product pipeline and effective marketing strategies [6][16] - Despite a complex macro environment, management anticipates continued strong performance and growth opportunities, particularly in international markets [16][28] - The company raised its full-year revenue and EPS guidance, reflecting optimism about future performance [17][27] Other Important Information - The company returned $151 million to shareholders in Q3, marking a 118% increase year-over-year, and declared a dividend of $0.14 per share, up 8% from the previous year [23][24] - Inventory levels were up 12% in dollar terms, driven by investments ahead of the holiday season and higher product costs due to tariffs [24] Q&A Session Summary Question: European momentum and pre-books for next spring - Management noted that Europe grew 3% in Q3, with strong performance in key markets and positive pre-book trends for spring [31][32] Question: Momentum entering the season and demand trends - Management confirmed no material change in demand trends, emphasizing strong underlying business momentum [41][42] Question: Wholesale business growth drivers - Growth in the wholesale channel was primarily driven by existing accounts responding positively to the expanded product pipeline [65][66] Question: Sustainability of low single-digit growth in the Americas - Management expects continued positive growth in DTC, while U.S. wholesale may see a decline due to strong prior year comparisons [70][72] Question: Lifestyle offering growth rates and AUR opportunities - The tops business saw significant growth, with management confident in further expanding this category and improving average unit retail (AUR) [80][84]

Financial Data and Key Metrics Changes - In Q3, the company reported a net revenue growth of 7%, with international markets contributing approximately 75% of this growth and the U.S. contributing 25% [17][18] - Gross margin reached a record 61.7%, expanding 110 basis points year-over-year, despite an 80 basis point headwind from tariffs [19][20] - Adjusted EBIT margin was 11.8%, with adjusted diluted EPS at $0.34, both exceeding expectations [21] Business Line Data and Key Metrics Changes - Direct-to-consumer (DTC) sales grew 9%, driven by strong performance in both stores and online, with e-commerce up 16% [11][12] - Women's business grew 12% year-to-date, while men's business grew 5% [9][10] - The tops category saw notable growth, with overall tops up 9% and women's tops up 8% [81] Market Data and Key Metrics Changes - The U.S. market grew 3%, while international business was up 9%, led by double-digit growth in Asia [6][14] - In Europe, net revenues increased by 3%, with strong performance in the UK [22] - Asia's net revenues accelerated to up 12%, with double-digit growth in both DTC and wholesale [22] Company Strategy and Development Direction - The company is pivoting to a DTC-first strategy, focusing on becoming a head-to-toe denim lifestyle retailer [5][7] - Continued investment in marketing campaigns and strategic partnerships is aimed at enhancing brand relevance and expanding market share [6][7] - The company is also focusing on premiumization efforts, rolling out the Blue Tab premium collection [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum despite a complex external environment, citing strong consumer demand and effective strategies [16][45] - The company anticipates continued growth in the denim category and plans to leverage its market leadership to capture more share [42][45] - For Q4, the company expects organic net revenue growth of approximately 1%, with reported net revenues down about 3% due to non-comparable items [26][27] Other Important Information - The company returned $151 million to shareholders in Q3, a 118% increase year-over-year, and declared a dividend of $0.14 per share, up 8% [23][24] - Inventory levels were up 12% in dollar terms, driven by investments ahead of the holiday season [24] Q&A Session Summary Question: European momentum and Q4 guidance - Management noted that Europe grew 3% in Q3, with strong performance in key markets like the UK and Germany, and expects mid-single-digit growth for the year [32][33] - Q4 guidance reflects the impact of the 53rd week and tariffs, with a conservative approach due to macro uncertainties [35] Question: Momentum entering the season - Management confirmed no material change in demand trends, emphasizing strong positioning for the holiday season [41][42] Question: Wholesale business growth drivers - Growth in the wholesale channel was driven by existing accounts responding positively to fashion fits, with women's business outperforming [65][66] Question: SKU rationalization and inventory management - The company has reduced SKUs by about 15% compared to last year while expanding its lifestyle assortment, leading to higher productivity per SKU [74][75]

Financial Data and Key Metrics Changes - In Q3, the company achieved a net revenue growth of 7%, with international markets contributing approximately 75% of this growth and the U.S. contributing 25% [17] - Gross margin reached a record 61.7%, expanding 110 basis points year-over-year, despite an 80 basis point headwind from tariffs [18][19] - Adjusted EBIT margin was 11.8%, with adjusted diluted EPS at $0.34, both exceeding expectations [21] Business Line Data and Key Metrics Changes - Direct-to-consumer (DTC) sales increased by 9%, driven by strong performance in both stores and online, with e-commerce growing 16% [12][13] - Women's business grew 12% year-to-date, while men's business grew 5% [9] - The bottoms business saw a 6% increase, and tops grew 9% overall, with notable strength in women's tops [10][70] Market Data and Key Metrics Changes - The U.S. market grew 3%, while international business was up 9%, led by double-digit growth in Asia [5][14] - In Europe, net revenues increased by 3%, with strong performance in the UK [22] - Asia's net revenues accelerated to a 12% increase, driven by double-digit growth in key markets like India, Japan, and Korea [22] Company Strategy and Development Direction - The company is pivoting to a DTC-first strategy, focusing on becoming a head-to-toe denim lifestyle retailer [4][6] - Continued investment in impactful marketing campaigns and strategic partnerships is expected to drive brand momentum [5][6] - The company aims to expand its addressable market by defining and owning the denim lifestyle category [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum, citing a strong product pipeline and robust consumer demand [5][16] - Despite a complex macro environment, the company anticipates a strong finish to 2025 and continued growth into 2026 [16][28] - The company is taking a prudent approach to its Q4 outlook, expecting organic net revenue growth of approximately 1% [26] Other Important Information - The company returned $151 million to shareholders in Q3, a 118% increase year-over-year, and declared a dividend of $0.14 per share, up 8% [23][24] - Inventory levels were up 12% in dollar terms, driven by investments ahead of the holiday season [24] Q&A Session Summary Question: European momentum and Q4 guidance - Management noted that Europe grew 3% in Q3, with strong performance in key markets and positive pre-booking for spring [31][32] - Q4 guidance reflects a conservative approach due to the complex macro environment, with expected gross margin impacts from tariffs and the absence of a 53rd week [34] Question: Momentum entering the season and demand trends - Management confirmed no material change in demand trends, emphasizing strong positioning in the denim category [39][40] Question: Wholesale business growth drivers - Growth in the wholesale channel was driven by existing accounts responding positively to fashion fits, with new distribution points contributing as well [55] Question: Inventory management and SKU rationalization - The company has reduced SKUs by about 15% compared to last year while expanding its lifestyle assortment [63][64]

Market Performance - The three major U.S. indices closed higher, with the Dow Jones up by 192.34 points (0.43%) at 44,650.64 points, the Nasdaq up by 19.33 points (0.09%) at 20,630.66 points, and the S&P 500 up by 17.20 points (0.27%) at 6,280.46 points, with both the Nasdaq and S&P 500 reaching new all-time highs [1] - In the European market, the DAX30 index fell by 56.00 points (0.23%) to 24,465.93 points, while the FTSE 100 index rose by 110.69 points (1.25%) to 8,977.71 points [1][2] Company News - Nvidia's market capitalization closed at $4 trillion, with its stock price increasing nearly 1% [1] - Tesla's stock rose by 4.7% [1] - Nvidia's CEO Jensen Huang met with President Trump, who praised Nvidia's stock performance, noting a 47% increase since the implementation of tariffs [7] - Levi's raised its revenue guidance, expecting sales growth to withstand the impact of tariffs, leading to a 9% increase in its stock price in after-hours trading [8] Commodity and Currency Updates - Gold prices increased by 0.4% to $3,325.35 per ounce [3] - Bitcoin reached a new all-time high, continuing its upward trend, while Ethereum surpassed $3,000 for the first time since early February [3] - The U.S. dollar index rose by 0.1% to 97.652, with various currency exchange rates showing fluctuations against the dollar [2] Federal Reserve Insights - Federal Reserve Governor Waller expressed support for a potential interest rate cut in July, citing that current policy rates are too high [4] - San Francisco Fed President Daly indicated the possibility of two rate cuts in 2025, noting that the impact of tariffs on prices may be weaker than expected [5] - Fed official Musalem mentioned that the effects of tariffs might not be fully realized until later this year or early next year [6]

Core Viewpoint - Levi Strauss has raised its revenue guidance, indicating resilience against the impact of tariffs, leading to a 9% increase in stock price during after-hours trading [1] Revenue Guidance - The company now expects revenue growth of 1% to 2% for the current fiscal year, which is above analysts' average expectations and an improvement from the previous forecast of a decline of 1% to 2% [1] Product Expansion - The positive revenue outlook suggests that the company's efforts to expand into new products and categories are yielding results [1]