LEVI: Levi’s Stock Drops 8% Despite Quarterly Data That Crushed Estimates. What Happened?

Iconic jeans maker lifted its fiscal-year outlook, smashed earnings and revenue calls, and saw its profits go to the moon. But investors had other ideas.

🏆 Earnings Beat Everything

• Levi Strauss LEVI delivered the kind of quarter CEOs dream about: profits up more than 900% year-over-year, revenue up 7%, and gross margin at a record 61.7%. All was comfortably ahead of Wall Street estimates.
• After the closing bell Thursday, the company reported net income of $218.1 million, or 55 cents a share, compared to just $20.7 million a year earlier. Excluding one-offs, earnings hit 34 cents a share, topping consensus forecasts of 31 cents.
• Despite all that, Levi’s stock is lower by 8% ahead of Friday’s opening bell, a classic case of “sell the news.” Investors may have been spooked by too much optimism in the air — or by valuations that have already priced in a full-blown denim renaissance.

💰 Raised Prices for Bigger Results

• Levi’s margin expansion came from a textbook combo: higher prices, more volumes, fewer discounts, and a bigger push into direct-to-consumer sales through its own website and stores. Those channels offer much fatter margins than wholesaling to big retailers.
• CEO Michelle Gass said the brand’s pivot away from wholesalers is driving “a more premium and connected consumer experience.” Translation: you’re paying more for jeans, but you’re probably okay with it. Revenue hit $1.54 billion, topping the $1.5 billion modeled by Wall Street.
• Even with tariff headwinds and supply costs, Levi’s execution impressed analysts — though the stock’s decline suggests investors may be a little antsy over the prospects of even more growth and profits.

🤷🏻‍♂️ Guidance Lifted, Shares Lower

• Levi’s raised its fiscal-year revenue forecast to around 3% growth, up from prior guidance of 1–2%. It also bumped its adjusted EPS outlook to $1.27–$1.32, from $1.25–$1.30. These beefed-up figures reflect confidence in turnaround momentum, yes, in this economy.
• The stock is still up 42% year-to-date, so the post-earnings drop might also be about profit-taking and letting some air out. With the jeans giant outperforming apparel peers, some traders may just be locking in gains.