Denim clothing demand strong offset tariff impacts Levi Strauss & Co. Class A (LEVI.US) Q1 performance exceeds expectations and raises full-year guidance.

On Wednesday morning Beijing time, Levi Strauss & Co. Class A (LEVI.US) announced better-than-expected first-quarter performance and raised its full-year revenue and profit guidance. Boosted by this news, Levi Strauss & Co. Class A stock price rose over 9% after hours. Data shows that Levi Strauss & Co. Class A's first-quarter net revenue increased by 14% to $1.74 billion, surpassing analysts' expectations of $1.65 billion; adjusted earnings per share were $0.42, also exceeding analysts' expectations of $0.37. Levi Strauss & Co. Class A has been working to mitigate the impact of U.S. tariffs through price increases, cost control, negotiations with suppliers, and diversifying sourcing channels. The denim giant currently expects a net revenue growth rate of 5.5% to 6.5% for the 2026 fiscal year, higher than the previous forecast of 5% to 6%. Analysts' average expectation for that year's growth rate is 5.7%. Levi Strauss & Co. Class A also raised its annual adjusted earnings per share outlook from a range of $1.40 to $1.46 to a range of $1.42 to $1.48. In January, the company stated that it anticipates a 150 basis point decline in profit margins for the 2026 fiscal year, equivalent to $100 million, and plans to fully offset this loss. Levi Strauss & Co. Class A CFO Harmit Singh said that the company's forecasts have not yet factored in the potential benefits of tariff reductions or refunds, which could further improve profit margins. He said, "Assuming all goes well and consumers continue to show resilience, the outlook could be even more optimistic." Levi Strauss & Co. Class A announced that Singh will retire after completing the planned transition and the company has started the search for his successor. Strong demand for denim apparel This optimistic outlook further indicates that despite pressure on budgets for middle and lower income families, demand for core denim apparel categories remains strong. Levi Strauss & Co. Class A stock price has risen by approximately 45% in the past 12 months. Consumer Edge analyst Michael Gunther said, "In a background of macroeconomic uncertainty and rising gasoline prices that could impact discretionary spending, Levi Strauss & Co. Class A's outperformance and optimistic comments stand out, especially considering the company's customer base." The company performed strongly in various consumer segments. Singh stated that sales of its high-end denim series Blue Tab increased by 40% in the first quarter, while sales of the Signature series priced at around $20 for low-income consumers on platforms such as Walmart Inc. and Amazon.com, Inc. increased by 16%. Levi Strauss & Co. Class A saw a 9% increase in sales in its largest market, the Americas region. Sales in Europe grew by 24% and sales in Asia increased by 13%. Comparable sales in its direct-to-consumer channels (including websites and stores) grew by 7% by the end of the quarter on March 1st.