LEVI Rallies After Hours on Strong Q2 Beat

by MarketNewsData

Levi Strauss & Co. (LEVI) surged in after-hours trading after delivering better-than-expected Q2 FY2025 results and raising full-year guidance.

Q2 FY2025 Highlights

Earnings Beat:

  • Adjusted EPS: $0.22 vs. $0.13 est. → +69% beat

Revenue Beat:

  • Revenue: $1.447B vs. $1.370B est. → +6% YoY, $77M beat

Guidance Raised:

  • FY25 EPS now $1.25–$1.30 (up from $1.20–$1.25); consensus was $1.23
  • FY25 revenue growth guided to 1–2% (from -1% to -2%)
  • Organic growth lifted to 4.5–5.5% (from 3.5–4.5%)

Financial & Operational Trends

  • Gross margin: 62.6% (+140 bps YoY)
  • Adj. EBIT margin: 8.3% (+190 bps YoY)
  • Adj. Net Income: $88.5M (+35% YoY)
  • DTC channel: +11% revenue growth (now 50% of total sales)
  • Regional growth: Europe +14%, Americas +5%, Asia flat
  • Wholesale: +3% reported, +7% organic

Cash Flow & Capital Allocation

  • Operating Cash Flow YTD: $238M (vs. $548.8M LY)
  • Adj. Free Cash Flow YTD: $131.9M (vs. $437M LY)
  • Q2 dividend paid: $51M; Q3 dividend set at $0.14/share
  • $100M+ in share repurchases planned post-Dockers® sale

Disclosures & Risk Factors

  • Dockers® now treated as discontinued operations
  • Guidance assumes elevated U.S.–China tariffs continue
  • Cited risks: macro pressure, tariffs, FX, inflation, supply chains, potential restructuring costs

Outlook:
Levi’s core brand strength and DTC push drove the beat. Raised guidance signals confidence in demand, especially in Europe and the Americas. However, cash flow declined and inventory rose 15%, which investors may monitor in future quarters.

After hours: $21.07 +1.34 (+6.79%)

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