Levi Strauss (LEVI) will likely report fiscal Q1 earnings per share in line with the consensus estimate of $0.28 and reaffirm its full-year outlook of $1.20 to $1.25 per share, UBS Securities said in an earnings preview Tuesday.

The firm noted a balanced upside and downside risk heading into the earnings release. Investor sentiment remains mixed, with some seeing potential for a valuation re-rating if the company successfully executes its transformation strategy, while others are cautious due to weak full-year 2025 revenue guidance.

Industry data suggests mid-single-digit year-over-year growth in direct-to-consumer sales in the US, indicating solid traction during the holiday season.

UBS Evidence Lab also reported that Levi's US searches rose 8% and international searches increased 20% year-over-year in Q1. Additionally, global website visits climbed 14%, reflecting broad-based strength across key markets, according to the note.

However, the firm noted that Levi's promotional activity increased modestly compared to the prior year, which could impact margins.

UBS maintained its buy rating with a $25 price target.

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