By Katherine Hamilton

Levi Strauss & Co. raised its fiscal-year guidance as its direct-to-consumer business is flourishing despite tariff concerns.

The apparel company said Thursday it is now expecting annual revenue to increase 1% to 2%, after previously guiding for a 1% to 2% decline in fiscal-year sales. Levi Strauss also raised its annual adjusted earnings per share range to $1.25 to $1.30, up from $1.20 to $1.25. That puts guidance ahead of analysts' estimates for $1.23 a share.

Strong results in the first half of the year prompted Levi Strauss to boost its outlook, as the jeans maker is putting more effort into its direct-to-consumer business over its wholesale segment, Chief Financial Officer Harmit Singh said. The pivot in expectations comes after Levi Strauss said tariffs were creating an uncertain consumer environment and it was planning to raise some prices.

Thursday's guidance assumes tariffs on imports from China remain at 30%, and are 10% for the rest of the world. Levi Strauss shares slid in April after management said it would make "surgical" price hikes to offset the higher cost of tariffs. The retailer sources from around 20 countries for the U.S. market, including 5% from Mexico and 1% from China.

Revenue in the second quarter rose 6.4%, to $1.45 billion, beating analysts' $1.37 billion estimate. Direct-to-consumer sales drove that increase, jumping 11% and comprising half of the total revenues in the second quarter. Wholesale rose 3%.

Second-quarter profit was $67 million, or 17 cents a share, compared with $18 million, or 4 cents a share, a year earlier. Stripping out certain one-time items, adjusted per-share earnings were 22 cents, ahead of the 13 cents forecast by analysts, according to FactSet.

Earnings from continued operations, which excludes its Dockers business, were 20 cents a share. Levi is in the process of selling Dockers, which is set to wrap up by the end of the year.

Levi Strauss also raised its quarterly dividend by 1 cent, to 14 cents a share, which will be payable on Aug. 8.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

By Katherine Hamilton

Levi Strauss & Co. raised its fiscal-year guidance as its direct-to-consumer business flourishes despite tariff concerns.

Strong results in the first half of the year prompted Levi Strauss to boost its outlook, as the jeans maker is putting more effort into its direct-to-consumer business, Chief Financial Officer Harmit Singh said. Shoppers are continuing to spend after Levi Strauss said new tariffs were creating an uncertain consumer environment and it was planning to raise some prices.

"The consumer is resilient," he said. "We believe we're growing faster than the category, and that means growing market share."

Shares rose 8%, to $21.23, in after-hours trading Thursday, and were up 14% year-to-date at market close.

The San Francisco company said Thursday now expects annual revenue to increase 1% to 2%, after previously guiding for a 1% to 2% decline in fiscal-year sales. It also raised its annual adjusted earnings per share range to $1.25 to $1.30, up from $1.20 to $1.25. That puts guidance ahead of analysts' estimates for $1.23 a share.

Tariffs are expected to hurt Levi Strauss's profitability by $25 million to $30 million for the rest of the year, Singh said. That translates to a 2- to 3-cent dent to earnings per share after mitigation, which includes negotiating with vendors and raising some prices, he said.

Thursday's guidance assumes tariffs on imports from China remain at 30%, and are 10% for the rest of the world. The retailer sources from around 20 countries for the U.S. market, including 5% from Mexico and 1% from China.

Singh said management was still able to raise guidance despite tariffs because consumers, especially women, are buying more directly with the company. Volume growth accounted for two-thirds of total sales growth in the second quarter, while higher ticket prices drove the other third, he said.

"Our ambition to transform into a best-in-class DTC-first retailer is becoming a reality," Singh said.

To boost its direct-to-consumer offerings, Levi Strauss is opening more stores, producing more clothing categories beyond jeans and gearing its marketing toward e-commerce. Online sales now make up 20% of the company's business, up from the single digits when Singh started a decade ago, he said.

Direct-to-consumer sales made up 50% of total revenue, edging closer to Levi Strauss's goal of the segment comprising 55% of sales by 2027. Overall revenue in the second quarter rose 6.4%, to $1.45 billion, beating analysts' $1.37 billion estimate. Wholesale rose 3%.

Women have been a particularly strong demographic, driven in part by its campaign with singer Beyonce, who referenced the brand's name in a song title on her latest album. Women now make up about 40% of Levi's direct-to-consumer sales, up from about a fifth of the business, Singh said.

Second-quarter profit was $67 million, or 17 cents a share, compared with $18 million, or 4 cents a share, a year earlier. Stripping out certain one-time items, adjusted per-share earnings were 22 cents, ahead of the 13 cents forecast by analysts, according to FactSet.

Earnings from continued operations, which excludes its Dockers business, were 20 cents a share. Levi is in the process of selling Dockers, which is set to wrap up by the end of the year.

Levi Strauss also raised its quarterly dividend by 1 cent, to 14 cents a share, which will be payable on Aug. 8.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

July 10, 2025 17:10 ET (21:10 GMT)

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