Levi Strauss & Co. closed fiscal 2025 with steady top line growth and stronger profitability, capping the year with a fourth quarter defined by resilient DTC gains, a fast growing Beyond Yoga® business, and continued progress on its “denim lifestyle” strategy. The San Francisco company is guiding to mid single digit revenue growth and further margin expansion in 2026, underlining confidence in its direct to consumer pivot and disciplined cost control.
Q4 2025: Modest Growth, DTC Momentum
In the fourth quarter ended November 30, 2025, net revenues reached $1.8 billion, up 1% on a reported basis and 5% on an organic basis compared to Q4 2024. Growth was broad based, with Europe up 8% reported (10% organic), Asia up 2% reported (4% organic), and Americas down 4% reported but up 2% organically.
The DTC channel continued to outpace the broader business, with net revenues up 8% on a reported basis and 10% organically, and ecommerce growing 19% reported (22% organic); DTC accounted for 49% of total net revenues in the quarter. Meanwhile, Beyond Yoga® stood out with 37% reported growth (45% organic).
Profitability And EPS
Q4 gross margin was 60.8%, down from 61.8% a year earlier, primarily due to tariffs, partially offset by initial price increases. Operating margin held steady at 11.9% in both Q4 2025 and Q4 2024, while adjusted EBIT margin declined to 12.1% from 13.9%, reflecting tariff headwinds and the impact of lapping a prior year’s 53rd week.
Net income from continuing operations came in at $160 million, versus $180 million in Q4 2024; adjusted net income was $163 million, down from $200 million. Diluted EPS from continuing operations was $0.40, compared to $0.45 a year earlier, with adjusted diluted EPS at $0.41 versus $0.49.
Full-Year 2025: Revenue Up 4 Percent, Margins Higher
For fiscal 2025, reported net revenues totaled $6.3 billion, up 4% year on year and 7% on an organic basis. Gross margin expanded to 61.7%, an increase of 110 basis points over fiscal 2024, supported by pricing and mix.
Operating margin more than doubled to 10.8% from 4.4% in fiscal 2024, while adjusted EBIT margin improved to 11.4% from 10.7%, marking the third consecutive year of adjusted margin expansion. Net income from continuing operations rose to $502 million from $210 million, and adjusted net income climbed to $537 million from $499 million. Diluted EPS increased to $1.26 from $0.52, with adjusted diluted EPS at $1.34 versus $1.24.
Operating cash flow reached $530 million, and adjusted free cash flow was $308 million. The company returned $363 million to shareholders, up 26% versus the prior year, including $213 million in dividends and $150 million in share repurchases, representing 7.2 million shares.
CEO And CFO On DTC First Strategy
Michelle Gass, President and CEO of Levi Strauss & Co., said, “Over the past few years, we’ve taken bold steps toward becoming a DTC first, head to toe denim lifestyle brand,” narrowing its focus, improving execution, and increasing agility to deliver faster growth and higher profitability. She described LS&Co. as being at an “inflection point,” emerging as a stronger, more resilient global business ready to define its next chapter.
Harmit Singh, Chief Financial and Growth Officer, said LS&Co. delivered 5% organic growth in Q4 on top of 8% growth in the prior year, with the denim lifestyle strategy expanding the addressable market and positioning the company for mid single digit growth in 2026 and beyond. He noted that adjusted EBIT margin improved for the third straight year and reiterated the company’s ambition to move toward a 15% adjusted EBIT margin, supported by a new $200 million accelerated share repurchase program.
Balance Sheet, Dockers® Sale And Capital Returns
As of November 30 2025, cash and cash equivalents stood at $758 million, with total liquidity of about $1.7 billion; inventories were up 9% year on year. On July 31, 2025, LS&Co. sold the Dockers® intellectual property and operations in the U.S. and Canada, and expects the sale of the remaining Dockers® operations to be completed around February 27, 2026; the business is reported as discontinued operations.
In Q4, the company returned $55 million to shareholders through dividends of $0.14 per share and completed its existing accelerated share repurchase, retiring about 5.6 million shares over the program. Looking ahead, LS&Co. plans to enter into a new $200 million ASR and has $440 million remaining under its current share repurchase authorization as of quarter end.
Fiscal 2026 Outlook
For fiscal 2026, LS&Co. expects reported net revenue growth of 5% to 6% and organic net revenue growth of 4% to 5%, with gross margin roughly flat to fiscal 2025. Adjusted EBIT margin is projected to expand to between 11.8% and 12%, and the effective tax rate is expected to be about 23%, around 2 points higher than the prior year.
The company guides to adjusted diluted EPS of $1.40 to $1.46, including an estimated $0.04 headwind from the higher tax rate, assuming no major deterioration in macroeconomic conditions, tariffs, inflation, supply chain, or currency volatility.
