The net revenue increased 8 per cent year on year (YoY) to $1.56 billion in the quarter ended May 31, 2026, while organic net revenues rose 6 per cent.
Levi Strauss & Co has reported Q2 FY26 net revenue of $1.56 billion, up 8 per cent YoY, while net income rose 19 per cent to $95 million.
DTC revenue increased 11 per cent and e-commerce sales grew 19 per cent.
Backed by strong first-half performance, the company raised its FY26 revenue growth forecast to 7-7.5 per cent and adjusted EPS guidance to $1.46-$1.52.
“The Levi’s brand is connecting with consumers around the world in more powerful ways than ever before, and our Q2 results are another proof point that our strategies are working and our team is executing,” said Michelle Gass, president and CEO of Levi Strauss & Co.
“Our evolution into a DTC-first, denim lifestyle company—with a much larger addressable market—is translating to faster growth and higher profitability. While we are pleased with the progress, we are still in the early stages of our long-term growth journey, with more ways to win than ever before,” added Gass.
“We delivered another strong quarter driven by broad-based growth across markets, channels and categories,” said Harmit Singh, chief financial and growth officer of Levi Strauss & Co.
Americas, Asia lead broad-based regional growth
Regional performance remained broad-based. In the Americas, net revenues rose 9 per cent to $815 million, with the US market posting a 5 per cent increase. Europe recorded a 4 per cent rise in reported revenue to $420 million, though organic revenue slipped 1 per cent due to the timing impact of last year’s distribution centre transition. In Asia, reported revenue increased 10 per cent to $284 million, while organic revenue grew 12 per cent.
The company’s Beyond Yoga brand continued to outperform, with revenue rising 16 per cent to $43 million, Levi Strauss said in a press release.
Channel-wise, Levi’s DTC business remained a key growth engine, with net revenues increasing 11 per cent on a reported basis and 8 per cent organically. E-commerce revenue climbed 19 per cent on a reported basis, while DTC comparable sales increased 6 per cent. DTC accounted for 51 per cent of total quarterly net revenues. Wholesale revenue also advanced, rising 5 per cent on a reported basis and 3 per cent organically.
Margins, earnings improve in Q2
Profitability improved during the quarter. Gross margin expanded by 10 basis points (bps) to 62.7 per cent, supported by lower product costs and pricing actions, although tariffs and foreign exchange remained headwinds. Operating margin improved to 7.8 per cent from 7.5 per cent a year earlier, while adjusted EBIT margin increased to 9 per cent from 8.3 per cent.
The operating income rose across all major regions. The Americas generated operating income of $164 million, up 7 per cent, Europe increased 28 per cent to $89 million, and Asia surged 44 per cent to $43 million. Beyond Yoga narrowed its operating loss to $2 million from $4 million a year earlier.
Net income from continuing operations increased 19 per cent to $95 million, while adjusted net income rose 24 per cent to $110 million. Diluted earnings per share (EPS) from continuing operations improved to $0.24 from $0.20, and adjusted diluted EPS increased to $0.28 from $0.22.
For the first six months of FY26, net revenues reached $3.31 billion, up 11 per cent on a reported basis and 8 per cent organically.
Levi’s improves outlook backed by DTC momentum
Reflecting the stronger first-half performance, Levi Strauss raised its FY26 guidance. The company now expects reported net revenue growth of 7-7.5 per cent, up from the previous forecast of 5.5-6.5 per cent, while organic revenue growth is projected at 5.5-6 per cent compared with the earlier outlook of 4.5-5.5 per cent.
The company also lifted its adjusted diluted EPS guidance to $1.46-1.52, from $1.42-1.48, while expecting gross margin to improve by up to 10 basis points over the prior year. The outlook assumes US tariffs on imports from China remain at 30 per cent and tariffs on imports from the rest of the world remain at 20 per cent.
“Given our strong first-half results, we are passing through our full Q2 beat and raising our full-year guidance. We are also increasing our dividend, reflecting confidence in the strength of our business,” added Singh.
Fibre2Fashion News Desk (SG)
