Levi Strauss & Co. (SGLJF) reported adjusted earnings of $0.41 per share for the quarter ended November 24, surpassing analysts’ consensus by $0.02 and marking the third consecutive quarter of upside surprises. Revenue growth was driven by solid performance in key regions, with North America sales rising by 4% year-over-year and EMEA markets contributing a 3% increase. The stronger-than-expected results underscore the company’s ability to navigate a volatile retail environment and maintain positive momentum in its core denim business.

The company’s direct-to-consumer (DTC) segment delivered a 9% increase in net revenues, reflecting ongoing investments in e-commerce, store remodels and loyalty programs. This growth offset a 2% decline in wholesale sales, which faced inventory destocking and cautious buying patterns at major department stores. DTC now represents 45% of total revenues, up from 40% a year earlier, highlighting the strategic shift toward higher-margin channels and deeper customer engagement.

Despite tariff headwinds on imported denim, Levi sustained gross margins in the low 60% range for the quarter, in line with management’s guidance. The company reiterated its full-year FY26 outlook, forecasting flat gross margins and a modest expansion in EBIT margin driven by ongoing productivity improvements, supply-chain efficiencies and cost discipline. Investors will be watching closely for confirmation of these targets as the company refines its operational model and continues to sharpen its product lineup following the divestiture of non-core brands.