Levi's delivered a Q2 that surpassed Wall Street’s expectations, with management pointing to broad-based growth across both direct-to-consumer and wholesale channels as key drivers. CEO Michelle Gass highlighted the company’s transition to a DTC-first model, noting that owned channels now represent over half of sales. Key growth areas included women’s apparel and lifestyle categories beyond traditional denim, which benefited from disciplined assortment rationalization and increased full-price sell-through. Gass remarked that, “the brand has just never been stronger,” with collaborations and cultural marketing partnerships—like the Beyoncé campaign and NIKE collaboration—fuelling consumer engagement.
Is now the time to buy LEVI? Find out in our full research report (it’s free).
Levi's (LEVI) Q2 CY2025 Highlights:
- Revenue: $1.45 billion vs analyst estimates of $1.37 billion (6.4% year-on-year growth, 5.8% beat)
- Adjusted EPS: $0.22 vs analyst estimates of $0.13 (63.4% beat)
- Adjusted EBITDA: $169.6 million vs analyst estimates of $127.2 million (11.7% margin, 33.4% beat)
- Management raised its full-year Adjusted EPS guidance to $1.28 at the midpoint, a 4.1% increase
- Operating Margin: 7.5%, up from 1.5% in the same quarter last year
- Locations: 1,195.8 at quarter end, down from 1,229.3 in the same quarter last year
- Constant Currency Revenue rose 8.8% year on year, in line with the same quarter last year
- Market Capitalization: $8.30 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Levi's’s Q2 Earnings Call
- Matthew Boss (JPMorgan) asked about drivers of the recent demand strength and potential moderation. CEO Michelle Gass emphasized broad-based growth, rising AURs, and strong market share, saying, “the brand has just never been stronger.”
- Laurent Vasilescu (BNP Paribas) questioned the outlook for wholesale revenue growth in the second half. CFO Harmit Singh described the approach as “prudent and judicious,” with positive order books but an emphasis on managing channel volatility.
- Dana Telsey (Telsey Advisory Group) inquired about upcoming marketing activations and pricing power. Gass highlighted ongoing collaborations and a new men’s campaign, while Singh noted continued AUR gains without sacrificing volume.
- Jay Sole (UBS) asked about operational rigor and the transformation in the tops business. Gass described improved agility, a more globally directed assortment, and a complete reset in tops, resulting in double-digit growth across genders and channels.
- Christopher Nardone (BofA) focused on DTC margin evolution and the path to sub-50% SG&A rates. Singh explained that DTC profitability has improved significantly, with revenue per square foot and cost management as key drivers.
Catalysts in Upcoming Quarters
In the coming quarters, StockStory analysts will be monitoring (1) the impact of new product launches and marketing campaigns on consumer traffic and full-price sales, (2) the company’s ability to mitigate tariff-related margin pressures through pricing and supply chain adjustments, and (3) continued momentum in international markets, particularly Europe and Asia. Progress in expanding the loyalty program and driving category mix shifts will also be important signposts.
Levi's currently trades at $20.98, up from $19.74 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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