Levi Strauss & Co. raised its full-year adjusted earnings guidance after tariff refunds under the International Emergency Economic Powers Act provided a significant profit boost in its fiscal third quarter, though the company's direct-to-consumer segment missed internal targets.
The company now expects adjusted diluted earnings per share of $1.54 to $1.56 for the full fiscal year ending November 29, 2026, up from its prior guidance of $1.46 to $1.52. Levi also raised its gross margin outlook to up 130 basis points versus the prior year, compared with its previous forecast of up 10 basis points. Full-year net revenue growth is now expected at approximately 7%, the low end of its earlier range of 7% to 7.5%.
For the quarter ended August 30, net revenues rose 4% to $1.61 billion. Adjusted diluted earnings per share came in at $0.48, compared with $0.34 in the same period a year earlier. Analysts had expected revenue of $1.62 billion and adjusted earnings of 36 cents per share, according to CNBC .
The tariff refunds reduced cost of goods sold by $79 million and lifted quarterly earnings per share by 16 cents, of which roughly 5 cents — or about $25 million — was channeled back into promotions and marketing, leaving a net per-share benefit of 11 cents. Over the course of the full fiscal year, the company expects to reinvest roughly $60 million of its total tariff refund windfall.
The direct-to-consumer segment was a weak point. DTC revenue rose 2% overall, but fell 1% in the U.S. and 2% in Europe. Comparable DTC sales were flat. Chief Executive Michelle Gass said the company designed its U.S. back-to-school push around baggy silhouettes, but shoppers moved decisively in the opposite direction, gravitating toward low-rise styles instead.
"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," Gass told investors Wednesday, according to The Wall Street Journal .
Wholesale revenue rose 6% in the quarter, with strength across all segments. Asia was a standout, with net revenues up 5% on a reported basis and 10% on an organic basis.
Levi said its DTC business is tracking toward mid-single-digit growth in the fourth quarter. The company also said it plans to initiate a $100 million accelerated share repurchase program and declared a quarterly dividend of $0.16 per share, a 14% increase over the prior year, payable November 4.
