Levi Strauss & Co. (NYSE: LEVI) will release its third quarter earnings report after the closing bell on Wednesday, October 7. Analysts expect the San Francisco-based apparel maker to report quarterly earnings of 36 cents per share, up from 34 cents in the year-ago period.

The consensus estimate for LEVI’s quarterly revenue stands at $1.62 billion. This represents a projected increase from the $1.54 billion reported in the same period last year, according to Benzinga Pro data. The company posted better-than-expected second-quarter results on July 8.

Analyst ratings and price targets

Several Wall Street forecasters have adjusted their outlooks for Levi Strauss in recent weeks. While some firms maintained bullish stances with raised price targets, others adopted a more cautious approach following the previous quarter's performance.

What the numbers show

The divergence in analyst sentiment is visible in the spread of price targets and rating actions. JP Morgan’s raised target of $34 sits significantly higher than Wells Fargo’s downgrade target of $25, indicating a wide variance in expected valuation despite similar revenue forecasts. Furthermore, the projected EPS growth of approximately 6% (from 34 cents to 36 cents) aligns closely with the projected revenue growth of roughly 5% (from $1.54 billion to $1.62 billion), suggesting analysts expect margin stability rather than significant expansion or contraction in the upcoming quarter.

Levi Strauss & Co. raised its full-year fiscal 2026 guidance for net revenues and adjusted diluted EPS following strong second-quarter results that exceeded analyst expectations. The company now projects reported net revenue growth of 7.0% to 7.5%, up from the previous 5.5% to 6.5%, and adjusted diluted EPS between $1.46 and $1.52, compared to the prior range of $1.42 to $1.48. The updated sales outlook implies revenue between $6.722 billion and $6.753 billion, versus the previous range of $6.628 billion to $6.690 billion. Following the report, shares initially traded lower by 4% but recovered slightly in early trading the next day, rising 2.03% to $24.86.

For the quarter ended May 31, 2026, Levi Strauss reported net revenues of $1.562 billion, an 8% increase on a reported basis and 6% on an organic basis versus Q2 2025. This figure beat the analyst consensus estimate of $1.520 billion. Net income from continuing operations rose 19% to $95 million, while adjusted net income increased 24% to $110 million. Adjusted diluted EPS grew 27% year-over-year to $0.28, surpassing the analyst consensus estimate of $0.24. JPMorgan analyst Matthew Boss reiterated an Overweight rating and raised the price target from $32 to $33, noting that adjusted operating margin expansion to 9% exceeded consensus estimates of 8.9%.

Second Quarter Performance

Growth was broad-based across all geographic segments. The Americas segment reported net revenue of $815 million (+9% reported), Europe generated $420 million (+4% reported), and Asia recorded $284 million (+10% reported). Beyond Yoga® revenue reached $43 million (+16% reported). By channel, Direct-to-Consumer (DTC) net revenues increased 11% on a reported basis, comprising 51% of total net revenues, while wholesale net revenues grew 5%. Needham analyst Tom Nikic highlighted a second consecutive positive quarter in China and stated the company is set up well for the back half of the year.

Profitability and Margins

Gross margin expanded 10 basis points to 62.7%, driven by lower product costs and pricing actions. Operating margin improved to 7.8% from 7.5% in the prior year, while adjusted EBIT margin rose to 9.0% from 8.3%. Adjusted EBIT increased 18% to $141 million. BTIG analyst Robert Drbul maintained a Buy rating and price target of $27, noting the company ended the quarter with a clean inventory position.

Balance Sheet and Shareholder Returns

As of May 31, 2026, cash and cash equivalents totaled $849 million with total liquidity of approximately $1.8 billion. Total inventories decreased 7% compared to Q2 2025 to $1.16 billion. The company launched a $200 million accelerated share repurchase program in the first quarter, expected to finish in the third quarter, and had $240 million remaining under its broader repurchase authorization as of May 31. The board declared a quarterly dividend of $0.16 per share, a 14% increase over the prior year, payable on August 5, 2026.

Outlook

For the third quarter, Levi Strauss expects revenue growth of 4% to 5% and adjusted earnings of 34 to 36 cents per share. The company reiterated its long-term targets of reaching $10 billion in annual revenue and a 15% operating margin. Analysts at Needham noted that the company has "beaten-and-raised" twice this year and see opportunity for more upside in the second half.