Asked about areas of strength driving 6% organic revenue growth and the contribution of the expanded TAM, then questioned the implied moderation in H2 revenue guidance and if it reflects consumer behavior changes.

Michelle highlighted broad-based growth across channels (DTC up 8%, wholesale up 3%), genders (women's up 11%), categories (bottoms up 6%, tops up 5% adjusted), and geographies (U.S. up 5%, international up 6%, Asia up 12%). Harmit stated the H2 moderation is prudent and conservative, not due to a change in consumer behavior, which remains resilient. “Our consumer continues to be resilient as reflected in another quarter of strong results. It's broad-based across channels, geographies and categories.”

Inquired about Beyond Yoga's performance beyond e-commerce, specifically in stores, and the future marketing strategy, including regional and channel differences.

Michelle noted Beyond Yoga's continued double-digit growth (15-19%), driven by product expansion into lifestyle categories. She mentioned early but positive results from new, larger stores and untapped men's opportunity. For marketing, she highlighted the team's ability to create cultural moments (e.g., World Cup viral campaign) and global campaigns with local relevance (e.g., ROSÉ collaboration in Asia). “It just shows the power of this culture of being fast and agile and really maximizing the moment.”

Asked about the benefits and implications of the ERP implementation once completed, especially for the DTC-first strategy and potential margin impact.

Harmit emphasized that the ERP, slated for completion by mid-2027, will unlock data, enable faster decision-making, support the DTC-first model, and provide a foundation for AI and automation. He noted the successful migration of North America, Asia, and Beyond Yoga, highlighting the move to a cloud-based, standardized system. “This is about unlocking data. It's about ensuring that the users get access to data and get access to data on time and on a regular basis.”

LEVI

Levi Strauss (LEVI) Q2 FY26 earnings call: guidance and Q&A

Q: Inquired about the slowdown in Signature's Q2 growth compared to Q1 and the acceleration of European DTC, asking for Q3 outlook and confidence in full-year Europe guidance.

Michelle explained Signature's Q2 was part of a broader H1 growth of 9%, with expectations for H2 acceleration driven by new lifestyle offerings and women's business. Harmit clarified Europe's Q2 was impacted by the DC transition, but underlying DTC trends are strong (mid-to-high single-digit expectation for H2), and high single-digit wholesale prebooks support full-year mid-single-digit growth. “Europe in sort of minus 7 would have been -- sorry, minus 1 would have been plus 7, so that's Fact #1.”

Earnings call· May 2026 (Q2 FY26)· Consumer Discretionary· Jul 8, 2026

Source: earnings call transcript

Executive summary

Levi Strauss & Co. Q2 FY26 — Strong Growth Across Channels and Geographies, Guidance Raised

Levi Strauss & Co. delivered a strong Q2 FY26, with broad-based organic revenue growth of 6% driven by DTC and international markets. The company's strategic evolution into a DTC-first lifestyle brand is yielding consistent momentum, expanding its addressable market, and improving profitability. Management raised full-year guidance, reflecting confidence in continued execution and the resilience of its consumer base despite external uncertainties.

Highlights

Organic net revenues increased 6%, exceeding expectations across the top and bottom line.
Direct-to-consumer (DTC) revenue grew 8%, with comparable sales up 6% for the 17th consecutive quarter.
The women's business grew 11%, contributing to extended market share leadership in both men's and women's denim.
Adjusted diluted EPS grew 27% year-over-year to $0.28, ahead of guidance.
Full-year revenue and EPS guidance was raised for the second consecutive quarter, reflecting strong performance and momentum.

Concerns

Europe revenue declined 1% in Q2, reflecting the impact of last year's distribution center transition.
The U.S. distribution center transition has taken longer than planned, though it remains on track for completion by Q4.
Tariffs continued to be a headwind, contributing to a 40 basis point decline in Americas operating margin.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year reported net revenues	increase 7% to 7.5% high materiality	Full-year 2026 · FY26	High
Full-year organic net revenues	up 5.5% to 6% high materiality	Full-year 2026 · FY26	High
Full-year gross margin	expand approximately 10 basis points to prior year medium materiality	Full-year 2026 · FY26	High
Full-year adjusted EBIT margin	12% high materiality	Full-year 2026 · FY26	High
Full-year adjusted diluted EPS	approximately $1.46 to $1.52 high materiality	Full-year 2026 · FY26	High
Full-year store openings	50 to 60 net new doors medium materiality	Full-year 2026 · FY26	High
Q3 reported and organic net revenues	up 4% to 5% medium materiality	Q3 FY26	High
Q3 gross margin	expand around 10 basis points versus prior year to 61.8% medium materiality	Q3 FY26	High
Q3 adjusted EBIT margin	leverages approximately 10 basis points to 11.9% medium materiality	Q3 FY26	High
Q3 adjusted diluted EPS	approximately $0.34 to $0.36 high materiality	Q3 FY26	High
Capital return to shareholders	at least 55% to 65% of free cash flow high materiality	Ongoing	High
Q3 quarterly dividend	increasing by $0.02 to $0.16 per share high materiality	Q3 FY26	High
Long-term revenue target	$10 billion high materiality	Long-term	High
Long-term operating margin target	15% high materiality	Long-term	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Americas Overall growth driven by momentum in both DTC and wholesale. Operating margin declined due to the unfavorable impact of tariffs, partially offset by cost initiatives and pricing actions. U.S. growth: 5%	—	7%	—	declined 40 basis points
Europe Q2 decline reflects last year's distribution center transition. Underlying trends remain healthy with strength in key markets including Germany and the U.K. Operating margin driven by gross margin strength and lower distribution expenses. First half revenue growth: mid-single digitDTC growth: 7%Wholesale preorder growth for H2: high single-digit	—	declined 1%	—	increased nearly 400 basis points to 21.1%
Asia Fueled by double-digit growth across both DTC and wholesale. Performance was strong across markets as consumers continue to gravitate towards the expanded denim lifestyle assortment. China is beginning to see signs of progress with a return to growth.	—	increased 12%	—	15%, expanding 350 basis points versus prior year
Latin America Momentum is accelerating, led by Brazil, the Andes, and Colombia. Mexico is the second largest market globally and a key contributor to international performance. Mexico Q2 growth: 15%	—	double-digit growth	—	—
Signature (brand) Value-focused brand. Expected to accelerate in the second half of the year, supported by an expanded lifestyle assortment including a broader tops offering. First half growth: 9%	—	low single-digit rate	—	—
Beyond Yoga (brand) Led by strength in e-commerce. Momentum continues to be fueled by newness and expansion into lifestyle categories, including the launch of a new linen capsule.	—	16%	—	—

LEVI operating KPIs by quarter

LEVI operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Feb 2026 Q1 FY26	This call May 2026 Q2 FY26	Change vs prior quarter
Loyalty program members	46M Our loyalty program also continues to be a powerful driver of consumer engagement, reaching 46 million members globally, up 17% year-over-year with more than 2 million new members added in the first quarter. Source: earnings call transcript	<50M This quarter, we welcomed 3 million new members to our loyalty program, bringing global membership to nearly 50 million. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline	Details
Denim product collaborations with Football Federations	launch	Ahead of the global soccer championship
Linen capsule (Beyond Yoga)	launch	this summer

Risks & headwinds

Tariff environment uncertainty Full year

Incremental U.S. tariffs on imports from China at a 30% rate and the rest of the world at 20%

Mitigation:Full-year guidance continues to assume these rates and does not assume any benefit from potential tariff refunds ($80 million paid to date).

Europe distribution center transition impact Last year (Q2 FY25)

2 point drag on net revenues

Mitigation:The remap to an omni-channel distribution network was completed, and the company is seeing benefits in operational efficiency, distribution expense leverage, and profitability in Europe.

U.S. distribution center transition delays On track to complete by the beginning of the fourth quarter

Transition has taken longer than planned

Mitigation:Balancing strong demand with the operational shift; expects to eliminate duplicated costs, simplify the operating model, and improve inventory and service levels upon completion.

Higher tax rate and foreign exchange impacting gross margin Q3 FY26

$0.02 to $0.03 headwind to Q3 adjusted diluted EPS

Mitigation:This headwind is included in the Q3 adjusted diluted EPS guidance.

Q&A highlights

Inquired about the slowdown in Signature's Q2 growth compared to Q1 and the acceleration of European DTC, asking for Q3 outlook and confidence in full-year Europe guidance.

Michelle explained Signature's Q2 was part of a broader H1 growth of 9%, with expectations for H2 acceleration driven by new lifestyle offerings and women's business. Harmit clarified Europe's Q2 was impacted by the DC transition, but underlying DTC trends are strong (mid-to-high single-digit expectation for H2), and high single-digit wholesale prebooks support full-year mid-single-digit growth.

“Europe in sort of minus 7 would have been -- sorry, minus 1 would have been plus 7, so that's Fact #1.”

asked by Laurent Vasilescu · answered by Harmit Singh

2 min read 6 chapters

Detailed narrative

Strategic Evolution and Market Opportunity

Levi's is successfully transforming into a DTC-first lifestyle company, driving consistent growth and expanding its addressable market. The denim category is projected to grow mid-single digits annually through 2030, outpacing historical growth, and Levi's, as the market share leader, is uniquely positioned to capture this opportunity through innovation in fit and fabrics.

The expanded total addressable market (TAM) contributed roughly one-third of Q2 revenue growth, reinforcing the traction of the denim lifestyle strategy.

Brand-Led Marketing Success

The 'Behind Every Original' campaign, launched during the Super Bowl, continued to build brand heat globally and locally, featuring cultural icons like Doechii, Questlove, and SGA, alongside local talent such as Belinda and Alia Bhatt. A viral marketing campaign around the global soccer championship at Levi's Stadium, which turned a branding restriction into a social media moment, generated approximately 1 billion press impressions, demonstrating agile execution and cultural relevance.

Collaborations with K-pop star ROSÉ in Asian markets also fueled the women's business.

Product Innovation Driving Growth

The bottoms business grew 6% in Q2, driven by strength in core fits and newness, with looser silhouettes like 501 '90s for her and 501 Loose for him performing strongly. Categories beyond denim bottoms, including lightweight denim, linen shirts, dresses, and shorts (up 11%), contributed significantly to growth, expanding the head-to-toe offerings for consumers.

White denim in women's saw exceptional strength, growing 70% in the quarter.

DTC-First Retailer Momentum

Global direct-to-consumer (DTC) revenue increased 8% in Q2, comprising 51% of total company revenue, with comparable sales up 6% for the 17th consecutive quarter. E-commerce grew 17%, fueled by increased traffic, better conversion, and higher UPT/AUR due to reduced promotional activity. The loyalty program welcomed 3 million new members, bringing global membership to nearly 50 million, enhancing personalized experiences and leveraging data.

International and Brand Portfolio Strength

International revenue grew 6%, led by double-digit gains in Asia (up 12%) and Latin America (double-digit growth, with Mexico up 15%). China showed early signs of progress with a return to growth and improving underlying trends, supported by new leadership.

Beyond Yoga grew 16%, driven by e-commerce and expansion into lifestyle categories like a new linen capsule. Signature, the value-focused brand, grew at a low single-digit rate in Q2 but was up 9% for the first half of the year.

Infrastructure Transformation Progress

The company completed the remap of Europe to an omni-channel distribution network at the end of Q2, consolidating e-commerce fulfillment and realizing benefits in operational efficiency and profitability. The U.S. distribution center transition to Maersk is on track for Q4, aiming to eliminate duplicated costs and improve service levels.

A global ERP transformation is also progressing, with Asia and Beyond Yoga migrated onto the new platform, and Europe/Latin America on track for mid-2027 completion, enabling faster decision-making and AI/automation scaling.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.