Levi Strauss Reports 3.1% Revenue Growth to $1.53 Billion in Q1 Fiscal 2025

Levi Strauss & Co. reported a net revenue of $1,526.8 million for the first quarter of fiscal 2025, marking a 3.1% increase from $1,480.2 million in the same period last year. The company's gross profit rose to $947.6 million, up 8.9% from $869.8 million, resulting in a gross margin of 62.1%, compared to 58.8% in the prior year. Operating income saw a significant improvement, reaching $191.6 million, a stark contrast to the mere $0.6 million reported in the first quarter of 2024. This turnaround was largely attributed to lower restructuring charges and an increase in gross profit driven by higher revenues and improved gross margins.

In terms of profitability, Levi Strauss reported a net income of $135.0 million, compared to a net loss of $10.6 million in the previous year. Earnings per share from continuing operations were $0.35, a recovery from a loss of $0.03 per share in the same quarter last year. The company also noted a substantial decrease in restructuring charges, which fell to $6.7 million from $113.1 million, contributing to the improved financial performance.

Strategically, Levi Strauss is undergoing significant changes, including the ongoing sale process of its Dockers® business, which has been classified as discontinued operations. The company aims to complete this transaction within the fiscal year 2025. Additionally, Levi Strauss has been implementing "Project Fuel," a multi-year global productivity initiative aimed at optimizing operations and reducing costs. This initiative has already led to a reduction in corporate expenses, which decreased to $128.6 million from $169.8 million year-over-year.

Operationally, the company reported an increase in its direct-to-consumer (DTC) channel, which generated $787.5 million in revenue, up 9.1% from the previous year. The Americas region saw a 6.4% increase in net revenues, while the Asia segment reported a 6.7% rise. However, revenues in Europe declined by 5.4%, primarily due to unfavorable currency translation effects. The company also expanded its retail presence, with 1,169 company-operated stores in 39 countries as of March 2, 2025, an increase from the previous year.

Looking ahead, Levi Strauss anticipates continued growth driven by its DTC strategy and the ongoing optimization of its operations. However, the company remains cautious about external factors such as inflation, potential new tariffs, and changing consumer spending patterns, which could impact future performance. The company is committed to maintaining adequate liquidity and plans to return capital to shareholders through dividends and share repurchases, while also investing in growth opportunities.