LEVI Rallies After Hours on Strong Q2 Beat
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%)