Levi Strauss raised its full-year adjusted earnings forecast after receiving tariff refunds, while narrowing its revenue growth outlook to 7%.
The company now expects adjusted earnings of $1.54 to $1.56 a share, up from its earlier range of $1.46 to $1.52. LSEG analysts had expected $1.52 to $1.59. It forecasts revenue growth of 7%, the low end of its previous 7% to 7.5% range.
Third-quarter revenue rose about 4% to $1.61 billion, below analysts' $1.62 billion estimate. Sales in the Americas increased 4%, while U.S. sales declined 1%. Wholesale revenue grew 6%. Direct-to-consumer sales advanced 2%, with comparable sales roughly flat. That channel accounted for 45% of revenue.
Operating margin reached 13.8%, compared with 10.8% a year earlier. Tariff refunds added 4.9 percentage points to margin and 16 cents per share to earnings. Levi reinvested 5 cents in the business. Adjusted earnings were 48 cents a share, though the report said it was unclear how that compared with Wall Street's 36-cent expectation.
Net income for the three months ended Aug. 30 was $168.6 million, or 43 cents a share, compared with $218.1 million, or 55 cents, a year earlier. CEO Michelle Gass said direct-to-consumer sales fell short of internal expectations, but the company was encouraged by demand heading into the holiday season. Levi expects mid-single-digit growth in the segment in the fourth quarter.