Levi Strauss Q3 2026 Earnings Call: Complete Transcript

Levi Strauss (NYSE: LEVI ) held its third-quarter earnings conference call on Wednesday. Below is the complete transcript from the call. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

The full earnings call is available at Summary Levi Strauss & Co. reported a 5% organic revenue growth for Q3, driven by strong international performance, particularly in Asia, and growth in global wholesale. S. and Europe, but has implemented strategic initiatives to improve performance, including increased marketing investments and focusing on popular trends like low-rise fits.

Levi's announced a new CFO, John Vandemore, and expressed confidence in their long-term growth strategy, indicating that DTC will return to mid-single-digit growth in the fourth quarter. Operational highlights include a successful international business expansion, particularly in Asia, and the launch of a new AI shopping assistant to enhance e-commerce. The company redeployed tariff refunds into the business to support growth and enhance competitiveness, with a focus on marketing, supply chain improvements, and consumer promotions.

Levi Strauss provided guidance for mid-single-digit revenue growth and expects to maintain strong financial discipline and execution to achieve long-term profitability goals. Full Transcript OPERATOR Good day, ladies and gentlemen, and welcome to the Levi Strauss third quarter fiscal 2026 earnings conference call for the period ending August 30, 2026. All parties will be in a listen-only mode until the question-and-answer session, at which time instructions will follow. This conference call is being recorded and may not be reproduced in whole or in part without written permission from the company.

com. I would now like to turn the call over to Ida Orphan, Vice President of Investor Relations at Levi Strauss and Company. Ida Orphan, Vice President of Investor Relations Thank you for joining us on the call today to discuss the results for our third quarter of fiscal 2026. Joining me on today's call are Michelle Gass, our President and CEO, and Harmit Singh, our Chief Financial and Growth Officer.

We'd like to remind you that we will be making forward-looking statements based on current expectations, and those statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in our reports filed with the SEC. We assume no obligation to update any of these forward-looking statements. Additionally, during this call we will discuss certain non-GAAP financial measures which are not intended to be a substitute for our GAAP results.

com. Please note that Michelle and Harmit will be referencing organic net revenues or constant currency numbers unless otherwise noted, and the information provided is based on continuing operations. Finally, this call is being webcast on our IR website, and a replay of this call will be available on the website shortly. Today's call is scheduled for one hour, so please limit yourself to one question at a time to allow others to have their questions addressed.

And now I'd like to turn the call over to Michelle. Michelle Gass, President & Chief Executive Officer Welcome, everyone, and Thank you for joining us. Over the past several years we have transformed Levi Strauss into a more diversified, higher growth company. We have sharpened our focus on the areas where we see the greatest opportunities to win, expanded internationally, built a more balanced DTC and wholesale model, and evolved Levi's from a denim bottoms business into a leading global denim lifestyle company.

While we delivered strong results across much of the business, our DTC performance fell short of our expectations during the quarter. As we'll discuss on the call, we have a clear understanding of what worked and what did not, and we have already taken targeted actions to improve performance. Before I turn to our Q3 results, I'd like to take a moment to speak to the CFO appointment we announced last week. I'm delighted to share that we have named John Vandemore as the company's next CFO.

John brings more than two decades of financial leadership experience across global consumer businesses, most recently serving as CFO of Skechers where he helped support its growth into one of the world's largest footwear brands. He is a proven operator with deep financial expertise, a track record of driving profitable growth and margin expansion, and strongly aligns with our strategy, brand and culture. I also want to take this opportunity to thank Harmit for his leadership and dedication over the past 14 years. He has played an important role in transforming Levi Strauss into a more direct to consumer, diversified and profitable company.

Harmit has been a trusted partner to me and to our leadership team and I'm grateful for his many contributions to the company. Now turning to Q3, as a reminder, all numbers Harmit and I will reference are on an organic basis. The quarter again demonstrated the benefits of our diversified portfolio and reinforced our confidence that we have the right strategies in place to drive sustainable long term profitable growth. We delivered another quarter of mid single digit growth, up 5% on an organic basis, and year to date our business is up 7% versus the prior year.

Our international business grew 8% this quarter, led by Asia, which has been a consistent source of strength throughout the year and delivered another quarter of double digit growth while profitability continues to improve as the business scales. Global wholesale continued its strong momentum, up 6% with growth across all segments, and our strategy to expand beyond denim continues to deliver results. Categories outside our Levi's denim bottoms business accounted for approximately 50% of our top line growth in the quarter, driven in part by accelerating momentum in tops which grew 7%. S.

and Europe. In Europe, unseasonably warm weather across several key markets weighed on traffic for much of the quarter. As temperatures normalized, traffic and sales trends improved meaningfully, and those improvements continued into Q4 quarter to date. , while our marketing continued to generate strong consumer engagement and reinforce brand heat, we had fewer major brand building moments than a year ago.

In addition, our back to school campaign did not drive the level of traffic and demand we had anticipated. S. traffic challenges and have a clear plan to improve performance. We are increasing investment behind areas of strong consumer demand, particularly low rise fits, and strengthening inventory positions.

Accordingly, we are deepening our marketing investments, creating a stronger cadence of traffic-driving moments, and placing greater emphasis on mid funnel product marketing. We are strengthening commercial execution across our stores and digital channels with a sharpened focus on conversion and other key productivity metrics. S. direct to consumer business.

Combined with the continued improvement in Europe, this gives us confidence that DTC will return to at least mid single digit growth in the fourth quarter and deliver high single digit growth for the full year. To support these efforts and fuel growth, we are redeploying a substantial majority of the tariff refunds we recorded in the third quarter back into the business across both Q3 and Q4. In addition to increased marketing investments, we are putting those funds to work behind sharper value for consumers during key holiday promotional moments and enhanced supply chain capabilities to strengthen our competitive position and support sustainable long term growth.

I'll now walk you through the highlights from the quarter in the context of our strategies. Starting with our first strategy to be brand led: in Q3, we continue to reinforce Levi's position at the center of culture through impactful campaigns, premium experiences and iconic brand moments around the world. A recent example of this was our partnership with one of our top European wholesale accounts, Zalando, for its fall-winter campaign that featured Lily Collins in head-to-toe Levi's and showcased the breadth of our denim lifestyle offering across Europe.

And our debut at Paris Couture Week was another milestone in the elevation of the brand, bringing Levi's to one of fashion's most influential and prestigious global stages. Looking ahead, we have a consistent drumbeat of brand activations and marketing moments playing through year end with high impact partnerships including Shaboozey, and we are amplifying our strongest product franchises such as Loose, Low Rise and Super Low through increased marketing support and compelling product storytelling for the holidays. We are as prepared as we've ever been, with our most robust activation plan in years.

From breakthrough brand moments and experiential pop ups to elevated store experiences, personalized styling and curated gifting assortments, we are creating new ways for consumers to engage with Levi's throughout the holiday season. Combined with strong product newness and focused commercial execution, these efforts are designed to drive traffic, improve conversion and deepen consumer connection with the Levi's brand. Now turning to product. The Levi's brand grew 4%, with both men's and women's growing mid single digits.

While DTC pressure was most pronounced in our women's bottoms business, we have moved quickly to increase support behind winning trends and strengthen execution. Encouragingly, the DTC women's business accelerated in September, and we expect our total women's business to be up high single digits in Q4. In men's bottoms, newer iterations of our icons, including the 501 Loose and 501 Relaxed, continued to gain traction, demonstrating our ability to drive growth through both heritage and innovation.

In women's, we saw strong demand for wider leg silhouettes, and the low rise trend continued to fuel growth, with our Low Loose and newer platforms like the Cinch Baggie delivering standout performance. These strong performing franchises give us confidence in our ability to further scale proven fits and drive future growth. Importantly, growth in the quarter was balanced across both our core denim business and our expanding lifestyle assortment. Categories beyond bottoms contributed roughly half of our growth in the quarter, expanding our addressable market and building Levi's into a true denim lifestyle company.

Tops delivered a solid quarter of growth, led by women's tops which increased 10%. Growth was broad based across the assortment, with strong momentum in blouses, wovens, sweaters, outerwear and tees. Blue Tab continues to exceed our expectations, delivering strong double digit growth with broad based strength across both men's and women's. As we expand the assortment into more elevated products, including cashmere and premium knitwear, Blue Tab is extending the brand into higher price points, attracting new consumers and further premiumizing the Levi's brand in the marketplace.

Entering our fourth quarter, we are confident in our holiday assortment and the continued opportunity to build on the momentum we're seeing across our lifestyle categories. Sweaters will be a key focus, complemented by fresh denim innovation across both men's and women's. Taken together, we are entering the holiday season with a stronger assortment, exciting newness across both lifestyle categories and denim, and a compelling offering for consumers around the world. Now shifting to our next strategy: to be DTC first.

S. and Europe as I mentioned earlier. Importantly, both businesses have returned to positive trends in recent weeks. Our DTC businesses in Latin America and Asia continued to deliver exceptional momentum.

Latin America delivered broad based growth across key markets, while in Asia our DTC business achieved its seventh consecutive quarter of double digit growth driven by strong comp sales. Both Asia and Latin America remain underpenetrated from a DTC perspective relative to the company average, providing a significant runway for continued growth. Our e-commerce channel delivered another quarter of double digit growth. com and recently improved the site with richer storytelling, more dynamic videos and inspirational styling content.

, we launched our AI shopping assistant which provides styling advice, helping consumers discover new styles and build complete outfits. While still early, we're seeing fans who engage with the tool adding to bag at roughly three times our average rate. com. We are making great progress and both efforts remain on track for a global launch next year.

com will offer personalized experiences, dynamic outfit recommendations, immersive fit navigation and other unique capabilities that will convert more consumers into head-to-toe lifestyle shoppers. We're seeing positive momentum in the business and continue to expect our DTC channel to grow at a high single digit rate for the full year, including mid single digit growth in the fourth quarter. S. The continued momentum reflects the health of our brand with key partners and improving sell-through trends.

Importantly, we are seeing strength across a broader range of categories beyond denim, reflecting increasing confidence from wholesale partners in the breadth of the Levi's offering. The consistent performance we have seen in wholesale throughout the year reinforces our conviction in our DTC first but not DTC only strategy and demonstrates the complementary nature of our channels, allowing us to meet consumers wherever they choose to shop. Now turning to our third strategy, powering the portfolio. This quarter our international business grew 8%, led by Asia.

The momentum in the region was further supported by our breakthrough partnership with Rosé and a series of pop up experiences in Bangkok, Tokyo, Shanghai and Seoul. The consumer response was extraordinary, and together these activations generated more than 3 billion impressions and approximately 45 million in earned media value. We are also encouraged by the progress we're seeing in China, up 13%, where we continue to strengthen the brand and enhance execution. While still early, we believe China represents one of the most significant long term growth opportunities within our portfolio, and we are increasingly confident in our ability to unlock that potential over time.

Signature plays an important role in our portfolio by extending the reach of the Levi's brand. Signature grew 13% in the quarter, driven by strength in both core denim and our expanding lifestyle assortment. Denim, tops and outerwear, looser silhouettes and new categories like maternity all contributed to the brand's strong performance. Beyond Yoga was up 9%, driven by growth across both channels.

Glow Zone, our new performance collection which launched in July, is generating positive early results and supports our strategy of expanding Beyond Yoga into more occasions like higher intensity workout activities. As we approach closing out the year, we are more confident than ever in the long term. Over the last three years we have built a larger, more diversified and more profitable Levi Strauss, adding nearly 1 billion in revenue, significant margin expansion and stronger earnings, while significantly strengthening our cash generation.

With this strong foundation, we see meaningful opportunities to drive sustainable top and bottom line growth across our channels and markets as we further build our position as the leading global denim lifestyle company. And with that, I'll turn it over to Harmit. Harmit. Harmit Singh, Chief Financial and Growth Officer Thank you, Michelle.

Before we get into the quarter, I'd like to start by welcoming and congratulating John as the company's next CFO. John's deep financial expertise and strong track record, combined with the financial and growth foundation we have built as a world-class finance team, give me confidence that the company is well positioned to deliver sustainable, profitable growth. While the third quarter had its challenges, our teams responded quickly. As Michelle mentioned, we saw improving trends emerge in September, particularly in DTC and Women's, which gives us confidence in the actions underway and our updated outlook.

We enter the final quarter of the year with improving momentum, strong financial discipline, and a clear focus on execution. Before I turn to the results, I want to address the impact of tariff refunds, which create some unique dynamics in Q3 and Q4 results.