Levi Strauss lifts profit outlook after earnings beat

Levi Strauss & Co. raised its full-year adjusted earnings forecast after reporting third-quarter profit above analysts’ expectations, with tariff refunds helping lift margins. The company also reported flat comparable sales in its direct-to-consumer business, while wholesale revenue grew faster than DTC revenue. Adjusted earnings were 48 cents per share for the quarter ended August 30, beating the 36-cent analyst consensus cited in reports. Revenue rose 4% from a year earlier to $1.61 billion, slightly below the $1.62 billion estimate. Levi Strauss raised its full-year adjusted earnings-per-share forecast to $1.54 to $1.56, from $1.46 to $1.52. The company received $79 million in tariff refunds during the quarter. The refunds contributed to higher margins and earnings, according to the company’s reported results. Operating margin increased to 13.8% from 10.8% a year earlier, and gross margin rose 450 basis points to 66.2%. Sales performance varied by channel. DTC revenue increased 2%, while comparable DTC sales were flat; the channel accounted for 45% of total revenue. Wholesale revenue rose 6%. E-commerce sales within DTC grew 10%, according to the reported figures.