[10-Q] LEVI STRAUSS & CO Quarterly Earnings Report
Filing Impact
Filing Sentiment
Form Type
10-Q
Levi Strauss & Co. reported interim results through the quarter ended
Levi Strauss & Co. ha riportato risultati intermedi, riferiti al trimestre chiuso il August 31, 2025 , mostrando un continuo progresso sulle azioni strategiche e sull'allocazione del capitale. L'azienda ha classificato l'attività Dockers come detenuta per la vendita e ha venduto la proprietà intellettuale e le operazioni negli Stati Uniti e in Canada per $194.7M , registrando un utile di vendita di $139.0M al netto dei costi diretti, con i rimanenti asset Dockers attesi a chiudere intorno al January 31, 2026 . Levi ha avanzato la propria struttura del capitale emettendo €475.0M di note senior al 4.000% con scadenza 2030 e ha usato le proventi più denaro contante per rimborsare note simili dell'anno 2027. L'azienda ha restituito denaro tramite dividendi (aumenti trimestrali delle utili per azione a $0.14 ) e riacquisti di azioni, incluso un'acquisizione accelerata di riacquisto azioni con un pagamento anticipato di $120.0M . Sotto l'aspetto operativo, i ricavi netti sono cresciuti attraverso i segmenti e i canali con una forte performance DTC e e-commerce, mentre l'azienda ha registrato oneri di ristrutturazione legati a Project Fuel e ha mantenuto una posizione di liquidità vicina a $1.5B . I principali rischi includono oneri di ristrutturazione in corso (~$81.7M ), una storia di impairment pregresso per Beyond Yoga e la variabilità dei tassi di cambio e dell'imposta.
Levi Strauss & Co. informó resultados provisionales hasta el trimestre terminado el 31 de agosto de 2025 mostrando una progresión continua en acciones estratégicas y asignación de capital. La empresa clasificó su negocio Dockers como mantenido para la venta y vendió la propiedad intelectual y las operaciones en Estados Unidos y Canadá por $194.7M , registrando una ganancia por venta de $139.0M neta de costos directos, con los activos restantes de Dockers que se espera cierren alrededor del 31 de enero de 2026 . Levi avanzó su estructura de capital emitiendo €475.0M de notas senior al 4.000% con vencimiento en 2030 y utilizó los ingresos más efectivo para redimir notas del 2027 por importes similares. La compañía devolvió efectivo a través de dividendos (incrementos trimestrales por acción a $0.14 ) y recompras de acciones, incluyendo una recompra acelerada de acciones con un pago inicial de $120.0M . Operativamente, los ingresos netos crecieron en los distintos segmentos y canales con fortaleza de DTC y comercio electrónico, mientras la empresa registró cargos de reestructuración vinculados al Proyecto Fuel y mantuvo una posición de liquidez cercana a $1.5B . Los riesgos clave incluyen obligaciones de reestructuración en curso (~$81.7M ), historial de deterioro previo para Beyond Yoga y variabilidad de tipos de cambio y tasas impositivas.
리바이 스트라우스 & 컴퍼니는 2025년 8월 31일 종료 분기에 대한 중간 실적을 보고하며 전략적 조치와 자본 배분에 대한 지속적인 진전을 보였다고 발표했습니다. 회사는 Dockers 사업을 매각대상으로 분류했고 미국 및 캐나다의 지적 재산권과 운영을 $194.7M 에 매각했으며, 직접 비용을 차감한 순매출 이익 $139.0M를 기록했습니다. 남은 Dockers 자산은 약 2026년 1월 31일 에 종료될 것으로 예상됩니다. Levi는 자본구조를 강화하기 위해 2030년 만기 4.000%의 시니어 채권 €475.0M 을 발행했고 수익금과 현금을 사용하여 2027년 채권과 동액을 상환했습니다. 회사는 배당금(주당 분기별 증가를 $0.14 )과 자사주 매입으로 현금을 환원했고, 선취 현금지급 $120.0M 이 포함된 가속 주식환매도 실시했습니다. 운영 측면에서 순매출은 부문과 채널 전반에 걸쳐 증가했고 DTC 및 전자상거래의 강세를 보였으며, Project Fuel에 연계된 구조조정 비용을 기록했고 유동성은 약 $1.5B 에 근접했습니다. 주요 위험에는 진행 중인 구조조정 부채(~$81.7M ), Beyond Yoga에 대한 이전 impairment 이력, 환율 및 법인세율 변동성이 포함됩니다.
Levi Strauss & Co. a publié des résultats intermédiaires jusqu'au trimestre clos le 31 août 2025 , montrant une progression continue des actions stratégiques et de l'allocation du capital. L'entreprise a classé son activité Dockers comme détenue en vue de la vente et a vendu la propriété intellectuelle et les opérations aux États-Unis et au Canada pour $194.7M , enregistrant une plus-value sur la vente de $139.0M net des coûts directs, les actifs restants de Dockers devant être clos vers le 31 janvier 2026 . Levi a renforcé sa structure de capital en émettant €475.0M d'obligations seniors à 4,000% échéant en 2030 et a utilisé le produit plus les liquidités pour racheter des notes similaires de 2027. L'entreprise a retourné des liquidités par le biais de dividendes (augmentation trimestrielle du dividende par action à $0.14 ) et de rachats d'actions, y compris un rachat accéléré avec un paiement initial de $120.0M . Opérationnellement, les revenus nets ont augmenté sur les segments et canaux avec une forte performance DTC et e-commerce, tandis que l'entreprise a enregistré des charges de restructuration liées au Project Fuel et a maintenu une position de liquidité proche de $1.5B . Les risques clés incluent des passifs de restructuration en cours (~$81.7M ), l'historique de dépréciation préalable pour Beyond Yoga, et la variabilité des taux de change et des impôts.
Levi Strauss & Co. meldete Zwischenergebnisse bis zum Quartal zum 31. August 2025 und zeigte eine fortgesetzte Fortschritte bei strategischen Maßnahmen und Kapitalallokation. Das Unternehmen klassifizierte sein Dockers-Geschäft als zum Verkauf gehalten und verkaufte das geistige Eigentum und die Operationen in den USA und Kanada für $194.7M , wofür ein Veräußerungsgewinn von $139.0M nach Abzug der direkten Kosten aufgenommen wurde, während restliche Dockers-Vermögenswerte voraussichtlich um den 31. Januar 2026 geschlossen werden. Levi hat seine Kapitalstruktur vorangetrieben, indem es €475.0M Anleihen mit 4,000% Zins und Fälligkeit 2030 ausgab und die Erlöse plus Bargeld gebrauchte, um gleichwertige 2027er Anleihen zurückzuzahlen. Das Unternehmen kehrte Kapital durch Dividenden (quartalsweise Erhöhung pro Aktie auf $0.14 ) und Aktienrückkäufe zurück, einschließlich eines beschleunigten Aktienrückkaufs mit einer upfront Zahlung von $120.0M . Operativ wuchsen die Nettoumsätze branchen- und kanalübergreifend mit starker DTC- und E-Commerce-Leistung, während das Unternehmen Restrukturierungskosten im Zusammenhang mit Project Fuel verzeichnete und eine Liquiditätsposition nahe $1.5B beibehielt. Zu den Hauptrisiken gehören laufende Restrukturierungsverpflichtungen (~$81.7M ), frühere Wertminderungen für Beyond Yoga und Wechselkurs- sowie Steuersatzvariabilität.
أعلنت شركة ليڤي سترَوْس آند كو. عن نتائج نصف سنوية حتى الربع المنتهي في 31 أغسطس 2025 ، مع إظهار تقدم مستمر في الإجراءات الاستراتيجية وتخصيص رأس المال. صنفت الشركة عملها Dockers كخاضع للبيع وبيع الملكية الفكرية والعمليات في الولايات المتحدة وكندا بمبلغ $194.7M ، مسجّلة ربحاً من البيع قدره $139.0M صافيًّا من تكاليف مباشرة، مع توقع إغلاق أصول Dockers المتبقية نحو 31 يناير 2026 . عزّزت ليڤ بنية رأس المال لديها بإصدار €475.0M من سندات رئاسية بنسبة 4.000% واجلة حتى 2030، واستخدمت العائدات بجانب النقد لسداد سندات 2027 بنفس المبلغ تقريباً. عادت الشركة بالنقد من خلال توزيعات الأرباح (ارتفاع أرباح السهم ربع السنوي إلى $0.14 ) وإعادة شراء الأسهم، بما في ذلك إعادة شراء مُسرّعة للأسهم مع دفعة مقدمة قدرها $120.0M . تشغيلياً، ارتفعت الإيرادات الصافية عبر القطاعات والقنوات مع قوة الدروب-تِرو DTC والتجارة الإلكترونية، بينما سجلت الشركة مصروفات إعادة الهيكلة المرتبطة بمشروع Fuel وحافظت على موقع سيولة يقارب $1.5B . تشمل المخاطر الرئيسية الديون الناتجة عن إعادة الهيكلة القائمة (~$81.7M )، وتاريخ التخفيضات السابقة لـ Beyond Yoga، وتقلبات سعر الصرف ومعدلات الضريبة.
Levi Strauss & Co. 提供截至 2025年8月31日 季度的中期业绩，显示在战略行动和资本配置方面持续取得进展。公司将其 Dockers 业务分类为持有待售，并以 $194.7M 出售美国和加拿大的知识产权及运营，净扣直接成本后的出售收益为 $139.0M，Dockers 剩余资产预计在 2026年1月31日 左右完成。Levi 通过发行 €475.0M 的 4.000% 高级票据（到期日为 2030 年）来加强资本结构，并将募集所得与现金用于赎回类似金额的 2027 年票据。公司通过派发股息（每股季度分红增至 $0.14 ）和股票回购来返还现金，其中包含一次性前期付款 $120.0M 的加速回购。运营层面，净收入在各细分市场和渠道上实现增长，DTC 与电子商务表现强劲；同时公司记录了与 Project Fuel 相关的重组费用，并维持约 $1.5B 的流动性水平。主要风险包括正在进行的重组负债（约 $81.7M ）、Beyond Yoga 以往减值历史，以及外汇和税率波动。
Positive
- None.
Negative
- None.
Insights
Refinancing and buybacks strengthen liquidity and capital allocation.
Issuing
Share repurchases include an ASR with an initial
Project Fuel drives one‑time charges and ongoing restructuring liabilities.
Restructuring charges of
These actions may improve long‑term cost structure but carry execution risk and potential near‑term hits to cash and margins; investors should track remaining cash outflows and any additional charges through the end of
Levi Strauss & Co. ha riportato risultati intermedi, riferiti al trimestre chiuso il August 31, 2025 , mostrando un continuo progresso sulle azioni strategiche e sull'allocazione del capitale. L'azienda ha classificato l'attività Dockers come detenuta per la vendita e ha venduto la proprietà intellettuale e le operazioni negli Stati Uniti e in Canada per $194.7M , registrando un utile di vendita di $139.0M al netto dei costi diretti, con i rimanenti asset Dockers attesi a chiudere intorno al January 31, 2026 . Levi ha avanzato la propria struttura del capitale emettendo €475.0M di note senior al 4.000% con scadenza 2030 e ha usato le proventi più denaro contante per rimborsare note simili dell'anno 2027. L'azienda ha restituito denaro tramite dividendi (aumenti trimestrali delle utili per azione a $0.14 ) e riacquisti di azioni, incluso un'acquisizione accelerata di riacquisto azioni con un pagamento anticipato di $120.0M . Sotto l'aspetto operativo, i ricavi netti sono cresciuti attraverso i segmenti e i canali con una forte performance DTC e e-commerce, mentre l'azienda ha registrato oneri di ristrutturazione legati a Project Fuel e ha mantenuto una posizione di liquidità vicina a $1.5B . I principali rischi includono oneri di ristrutturazione in corso (~$81.7M ), una storia di impairment pregresso per Beyond Yoga e la variabilità dei tassi di cambio e dell'imposta.
Levi Strauss & Co. informó resultados provisionales hasta el trimestre terminado el 31 de agosto de 2025 mostrando una progresión continua en acciones estratégicas y asignación de capital. La empresa clasificó su negocio Dockers como mantenido para la venta y vendió la propiedad intelectual y las operaciones en Estados Unidos y Canadá por $194.7M , registrando una ganancia por venta de $139.0M neta de costos directos, con los activos restantes de Dockers que se espera cierren alrededor del 31 de enero de 2026 . Levi avanzó su estructura de capital emitiendo €475.0M de notas senior al 4.000% con vencimiento en 2030 y utilizó los ingresos más efectivo para redimir notas del 2027 por importes similares. La compañía devolvió efectivo a través de dividendos (incrementos trimestrales por acción a $0.14 ) y recompras de acciones, incluyendo una recompra acelerada de acciones con un pago inicial de $120.0M . Operativamente, los ingresos netos crecieron en los distintos segmentos y canales con fortaleza de DTC y comercio electrónico, mientras la empresa registró cargos de reestructuración vinculados al Proyecto Fuel y mantuvo una posición de liquidez cercana a $1.5B . Los riesgos clave incluyen obligaciones de reestructuración en curso (~$81.7M ), historial de deterioro previo para Beyond Yoga y variabilidad de tipos de cambio y tasas impositivas.
리바이 스트라우스 & 컴퍼니는 2025년 8월 31일 종료 분기에 대한 중간 실적을 보고하며 전략적 조치와 자본 배분에 대한 지속적인 진전을 보였다고 발표했습니다. 회사는 Dockers 사업을 매각대상으로 분류했고 미국 및 캐나다의 지적 재산권과 운영을 $194.7M 에 매각했으며, 직접 비용을 차감한 순매출 이익 $139.0M를 기록했습니다. 남은 Dockers 자산은 약 2026년 1월 31일 에 종료될 것으로 예상됩니다. Levi는 자본구조를 강화하기 위해 2030년 만기 4.000%의 시니어 채권 €475.0M 을 발행했고 수익금과 현금을 사용하여 2027년 채권과 동액을 상환했습니다. 회사는 배당금(주당 분기별 증가를 $0.14 )과 자사주 매입으로 현금을 환원했고, 선취 현금지급 $120.0M 이 포함된 가속 주식환매도 실시했습니다. 운영 측면에서 순매출은 부문과 채널 전반에 걸쳐 증가했고 DTC 및 전자상거래의 강세를 보였으며, Project Fuel에 연계된 구조조정 비용을 기록했고 유동성은 약 $1.5B 에 근접했습니다. 주요 위험에는 진행 중인 구조조정 부채(~$81.7M ), Beyond Yoga에 대한 이전 impairment 이력, 환율 및 법인세율 변동성이 포함됩니다.
Levi Strauss & Co. a publié des résultats intermédiaires jusqu'au trimestre clos le 31 août 2025 , montrant une progression continue des actions stratégiques et de l'allocation du capital. L'entreprise a classé son activité Dockers comme détenue en vue de la vente et a vendu la propriété intellectuelle et les opérations aux États-Unis et au Canada pour $194.7M , enregistrant une plus-value sur la vente de $139.0M net des coûts directs, les actifs restants de Dockers devant être clos vers le 31 janvier 2026 . Levi a renforcé sa structure de capital en émettant €475.0M d'obligations seniors à 4,000% échéant en 2030 et a utilisé le produit plus les liquidités pour racheter des notes similaires de 2027. L'entreprise a retourné des liquidités par le biais de dividendes (augmentation trimestrielle du dividende par action à $0.14 ) et de rachats d'actions, y compris un rachat accéléré avec un paiement initial de $120.0M . Opérationnellement, les revenus nets ont augmenté sur les segments et canaux avec une forte performance DTC et e-commerce, tandis que l'entreprise a enregistré des charges de restructuration liées au Project Fuel et a maintenu une position de liquidité proche de $1.5B . Les risques clés incluent des passifs de restructuration en cours (~$81.7M ), l'historique de dépréciation préalable pour Beyond Yoga, et la variabilité des taux de change et des impôts.
Levi Strauss & Co. meldete Zwischenergebnisse bis zum Quartal zum 31. August 2025 und zeigte eine fortgesetzte Fortschritte bei strategischen Maßnahmen und Kapitalallokation. Das Unternehmen klassifizierte sein Dockers-Geschäft als zum Verkauf gehalten und verkaufte das geistige Eigentum und die Operationen in den USA und Kanada für $194.7M , wofür ein Veräußerungsgewinn von $139.0M nach Abzug der direkten Kosten aufgenommen wurde, während restliche Dockers-Vermögenswerte voraussichtlich um den 31. Januar 2026 geschlossen werden. Levi hat seine Kapitalstruktur vorangetrieben, indem es €475.0M Anleihen mit 4,000% Zins und Fälligkeit 2030 ausgab und die Erlöse plus Bargeld gebrauchte, um gleichwertige 2027er Anleihen zurückzuzahlen. Das Unternehmen kehrte Kapital durch Dividenden (quartalsweise Erhöhung pro Aktie auf $0.14 ) und Aktienrückkäufe zurück, einschließlich eines beschleunigten Aktienrückkaufs mit einer upfront Zahlung von $120.0M . Operativ wuchsen die Nettoumsätze branchen- und kanalübergreifend mit starker DTC- und E-Commerce-Leistung, während das Unternehmen Restrukturierungskosten im Zusammenhang mit Project Fuel verzeichnete und eine Liquiditätsposition nahe $1.5B beibehielt. Zu den Hauptrisiken gehören laufende Restrukturierungsverpflichtungen (~$81.7M ), frühere Wertminderungen für Beyond Yoga und Wechselkurs- sowie Steuersatzvariabilität.
Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
Form 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the Quarterly Period Ended August 31, 2025
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
Commission file number: 001-06631
_________________
(Exact Name of Registrant as Specified in Its Charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of Principal Executive Offices) (Zip Code)
(415 ) 501-6000
(Registrant’s Telephone Number, Including Area Code)
None
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
_________________
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of "Large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Accelerated filer ¨ | Emerging growth company | |||||||
Non-accelerated filer ¨ | Smaller reporting company | |||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No þ
As of October 2, 2025, the registrant had 103,091,513 shares of Class A common stock, $0.001 par value per share and 287,738,043 shares of Class B common stock, $0.001 par value per share, outstanding.
Table of Contents
LEVI STRAUSS & CO. AND SUBSIDIARIES
INDEX TO FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
| Page Number | |||||||||||
PART I — FINANCIAL INFORMATION | |||||||||||
| Item 1. | Consolidated Financial Statements (unaudited): | ||||||||||
Consolidated Balance Sheets as of August 31, 2025 and December 1, 2024 | 3 | ||||||||||
Consolidated Statements of Income for the Three and Nine Months Ended August 31, 2025 and August 25, 2024 | 4 | ||||||||||
Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended August 31, 2025 and August 25, 2024 | 5 | ||||||||||
Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended August 31, 2025 and August 25, 2024 | 6 | ||||||||||
Consolidated Statements of Cash Flows for the Nine Months Ended August 31, 2025 and August 25, 2024 | 8 | ||||||||||
Notes to Consolidated Financial Statements | 9 | ||||||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 32 | |||||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 63 | |||||||||
| Item 4. | Controls and Procedures | 63 | |||||||||
PART II — OTHER INFORMATION | |||||||||||
| Item 1. | Legal Proceedings | 64 | |||||||||
| Item 1A. | Risk Factors | 64 | |||||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 64 | |||||||||
| Item 3. | Defaults Upon Senior Securities | 64 | |||||||||
| Item 4. | Mine Safety Disclosures | 64 | |||||||||
| Item 5. | Other Information | 65 | |||||||||
| Item 6. | Exhibits | 66 | |||||||||
SIGNATURE | 67 | ||||||||||
WHERE YOU CAN FIND MORE INFORMATION
Investors and others should note that we announce material financial information to our investors using our corporate website, press releases, SEC filings and public conference calls and webcasts (including our Investor Relations page at http://investors.levistrauss.com). We also use the following social media channels as a means of disclosing information about our company, products, planned financial and other announcements, attendance at upcoming investor and industry conferences and other matters, as well as for complying with our disclosure obligations under Regulation FD promulgated under the Securities Exchange Act of 1934, as amended.
•our X account (previously Twitter account) (https://X.com/LeviStraussCo);
•our company blog (https://www.levistrauss.com/unzipped-blog/);
•our Facebook page (https://www.facebook.com/levistraussco/);
•our LinkedIn page (https://www.linkedin.com/company/levi-strauss-&-co-);
•our Instagram page (https://www.instagram.com/levistraussco/); and
•our YouTube channel (https://www.youtube.com/user/levistraussvideo).
The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels in addition to following our press releases, SEC filings and public conference calls and webcasts. This list may be updated from time to time. The information we post through these channels is not a part of this Quarterly Report.
Table of Contents
PART I — FINANCIAL INFORMATION
| Item 1. | CONSOLIDATED FINANCIAL STATEMENTS | ||||
LEVI STRAUSS & CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| (Unaudited) | |||||||||||
| August 31, 2025 | December 1, 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Short-term investments in marketable securities | |||||||||||
| Trade receivables, net | |||||||||||
| Inventories | |||||||||||
| Other current assets | |||||||||||
Current assets held for sale | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Deferred tax assets, net | |||||||||||
| Operating lease right-of-use assets, net | |||||||||||
| Other non-current assets | |||||||||||
Non-current assets held for sale | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current Liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued salaries, wages and employee benefits | |||||||||||
| Accrued sales returns and allowances | |||||||||||
| Short-term operating lease liabilities | |||||||||||
| Other accrued liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Long-term operating lease liabilities | |||||||||||
| Long-term employee related benefits and other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies | |||||||||||
| Stockholders’ Equity: | |||||||||||
Common stock — $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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LEVI STRAUSS & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | August 31, 2025 | August 25, 2024 | ||||||||||||||||||||
| (Dollars in millions, except per share amounts) (Unaudited) | |||||||||||||||||||||||
| Net revenues | $ | $ | $ | $ | |||||||||||||||||||
| Cost of goods sold | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
| Restructuring charges, net | |||||||||||||||||||||||
| Goodwill and other intangible asset impairment charges | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Other income (expense), net | ( | ( | |||||||||||||||||||||
Income from continuing operations before income taxes | |||||||||||||||||||||||
Income tax expense (benefit) | ( | ( | |||||||||||||||||||||
Net income from continuing operations | |||||||||||||||||||||||
Net income (loss) from discontinued operations, net of taxes | ( | ( | |||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Earnings (loss) per common share: | |||||||||||||||||||||||
Continuing operations - Basic | $ | $ | $ | $ | |||||||||||||||||||
Discontinued operations - Basic | ( | ( | |||||||||||||||||||||
Net income - Basic | $ | $ | $ | $ | |||||||||||||||||||
Continuing operations - Diluted | $ | $ | $ | $ | |||||||||||||||||||
Discontinued operations - Diluted | ( | ||||||||||||||||||||||
Net income - Diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted-average common shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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LEVI STRAUSS & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | August 31, 2025 | August 25, 2024 | ||||||||||||||||||||
| (Dollars in millions) (Unaudited) | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss), before related income taxes: | |||||||||||||||||||||||
Pension and postretirement benefits | |||||||||||||||||||||||
Derivative instruments gains (losses) | ( | ( | ( | ||||||||||||||||||||
Foreign currency translation gains (losses) | ( | ( | |||||||||||||||||||||
| Unrealized gains (losses) on marketable securities | |||||||||||||||||||||||
Total other comprehensive income (loss), before related income taxes | ( | ( | |||||||||||||||||||||
Income tax benefit (expense) related to items of other comprehensive income | ( | ( | |||||||||||||||||||||
Comprehensive income (loss), net of taxes | $ | $ | ( | $ | $ | ||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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LEVI STRAUSS & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
| Three Months Ended August 31, 2025 | |||||||||||||||||||||||||||||||||||
Class A & Class B Common Stock (In Shares) | Class A & Class B Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
(Shares & Dollars in millions) (Unaudited) | |||||||||||||||||||||||||||||||||||
Balance at June 1, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | |||||||||||||||||||||||||||||||
| Stock-based compensation and dividends, net | — | ( | — | ||||||||||||||||||||||||||||||||
| Employee stock purchase plan | — | — | — | ||||||||||||||||||||||||||||||||
Accelerated share repurchase, including excise tax | ( | — | ( | ( | — | ( | |||||||||||||||||||||||||||||
| Tax withholdings on equity awards | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance at August 31, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Nine Months Ended August 31, 2025 | |||||||||||||||||||||||||||||||||||
| Class A & Class B Common Stock (In Shares) | Class A & Class B Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
| (Shares & Dollars in millions) (Unaudited) | |||||||||||||||||||||||||||||||||||
Balance at December 1, 2024 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | |||||||||||||||||||||||||||||||
| Stock-based compensation and dividends, net | — | ( | — | ||||||||||||||||||||||||||||||||
| Employee stock purchase plan | — | — | — | ||||||||||||||||||||||||||||||||
Accelerated share repurchase, including excise tax | ( | — | ( | ( | — | ( | |||||||||||||||||||||||||||||
| Repurchase of common stock | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Tax withholdings on equity awards | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance at August 31, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
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Table of Contents
| Three Months Ended August 25, 2024 | |||||||||||||||||||||||||||||||||||
Class A & Class B Common Stock (In Shares) | Class A & Class B Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
(Shares & Dollars in millions) (Unaudited) | |||||||||||||||||||||||||||||||||||
Balance at May 26, 2024 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Stock-based compensation and dividends, net | — | ( | — | ||||||||||||||||||||||||||||||||
| Employee stock purchase plan | — | — | — | ||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Tax withholdings on equity awards | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance at August 25, 2024 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Nine Months Ended August 25, 2024 | |||||||||||||||||||||||||||||||||||
Class A & Class B Common Stock (In Shares) | Class A & Class B Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
| (Shares & Dollars in millions) (Unaudited) | |||||||||||||||||||||||||||||||||||
Balance at November 26, 2023 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Stock-based compensation and dividends, net | — | ( | — | ||||||||||||||||||||||||||||||||
| Employee stock purchase plan | — | — | — | ||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Tax withholdings on equity awards | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance at August 25, 2024 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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LEVI STRAUSS & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Nine Months Ended | |||||||||||
| August 31, 2025 | August 25, 2024 | ||||||||||
| (Dollars in millions) (Unaudited) | |||||||||||
| Cash Flows from Operating Activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Goodwill and intangible asset impairment | |||||||||||
Property, plant, and equipment impairment, and early lease terminations, net | |||||||||||
Gain on sale of business, prior to costs to sell | ( | ||||||||||
Gain on sale of assets | ( | ||||||||||
| Stock-based compensation | |||||||||||
Deferred income taxes | ( | ||||||||||
| Other, net | ( | ||||||||||
| Net change in operating assets and liabilities | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
| Cash Flows from Investing Activities: | |||||||||||
| Proceeds from sale of business | |||||||||||
| Purchases of property, plant and equipment | ( | ( | |||||||||
Net proceeds from sales of assets | |||||||||||
Payment for business acquisition | ( | ||||||||||
Proceeds on settlement of forward foreign exchange contracts not designated for hedge accounting, net | |||||||||||
Payments to acquire short-term investments | ( | ||||||||||
Other investing activities, net | ( | ||||||||||
Net cash provided by (used for) investing activities | ( | ( | |||||||||
| Cash Flows from Financing Activities: | |||||||||||
Proceeds from issuance of long-term debt, net of issuance costs | |||||||||||
Repayments of long-term debt | ( | ||||||||||
Accelerated share repurchase | ( | ||||||||||
| Repurchase of common stock | ( | ( | |||||||||
| Tax withholdings on equity awards | ( | ( | |||||||||
| Dividends to stockholders | ( | ( | |||||||||
| Other financing activities, net | ( | ( | |||||||||
Net cash used for financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | ( | ||||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash | ( | ||||||||||
Beginning cash and cash equivalents | |||||||||||
| Ending cash and cash equivalents | $ | $ | |||||||||
| Noncash Investing Activity: | |||||||||||
| Property, plant and equipment acquired and not yet paid at end of period | $ | $ | |||||||||
| Supplemental disclosure of cash flow information: | |||||||||||
| Cash paid for income taxes during the period, net of refunds | |||||||||||
____________
Consolidated statements of cash flows include the cash flows from continuing and discontinued operations.
The accompanying notes are an integral part of these consolidated financial statements.
8
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Levi Strauss & Co. (the “Company”) is one of the world’s largest brand-name apparel companies. The Company designs, markets and sells – directly or through third parties and licensees – products that include jeans, casual and dress pants, activewear, tops, shorts, skirts, jackets and related accessories for men, women and children around the world under the Levi’s®, Levi Strauss Signature™, Denizen®, Dockers® and Beyond Yoga® brands.
In the fourth quarter of 2024 we announced we were undertaking an evaluation of strategic alternatives to the global Dockers® business, including a sale or other strategic transactions. During the second quarter of 2025, the Company entered into a definitive agreement to sell its Dockers® business. The transaction is subject to customary closing conditions and closed on July 31, 2025 for the Dockers® intellectual property and operations in the U.S. and Canada, and is expected to close on or around January 31, 2026 for the remaining Dockers® operations. Dockers® net assets were classified as held for sale in the consolidated balance sheets for all periods presented. Additionally, the Company classified the Dockers® business as discontinued operations in its consolidated statements of income for all periods presented. See Note 2 “Discontinued Operations”. The Dockers® business is a separate operating segment historically presented in our financial statements under the caption of Other Brands.
The Company operates its business according to three reportable segments: Americas, Europe, and Asia, collectively comprising the Company's Levi's Brands business, which includes the Levi's®, Levi Strauss Signature™ and Denizen® brands. In the first quarter of 2024 the Company announced the strategic decision to discontinue the Denizen® brand with the wind down of operations substantially complete as of March 2, 2025. The Beyond Yoga® business, which is managed separately, does not meet the quantitative thresholds for reportable segments but is presented separately to increase transparency of performance.
Basis of Presentation and Principles of Consolidation
The interim consolidated financial statements of the Company and its wholly-owned and majority-owned foreign and domestic subsidiaries, including the notes, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim period financial statements and do not include all of the information and disclosures required by generally accepted accounting principles in the United States (“U.S. GAAP”) for complete financial statements. In the opinion of management, all adjustments necessary for a fair statement of the financial position and the results of operations for the periods presented have been included. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 1, 2024, included in the Company’s 2024 Annual Report on Form 10-K.
The Company’s fiscal year ends on the Sunday that is closest to November 30 of that year, although the fiscal years of certain foreign subsidiaries end on November 30. Each quarter of both fiscal years 2025 and 2024 consists of 13 weeks, with the exception of the fourth quarter of 2024, which consisted of 14 weeks. All references to years and quarters relate to fiscal years and quarters rather than calendar years and quarters.
Use of Estimates
9
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
Distribution Center Conversion
On June 6, 2024, the Company entered into an agreement to replace certain of the Company’s legacy U.S. distribution centers with a new third party logistics center. The Company maintains certain rights over the warehouse, and warehouse equipment and technologies which resulted in an Operating lease right-of-use asset and lease liability of $30.6 14.0 61.6
Long-Lived Assets
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may be impaired. Impairment losses are measured and recorded for the excess of carrying value over its fair value, estimated based on expected future cash flows and other quantitative and qualitative factors. Property, plant and equipment, net includes accumulated depreciation of $1.3 billion as of both August 31, 2025 and December 1, 2024.
In the third quarter of 2024, the Company recorded $11.1 million of asset impairment charges related to technology projects discontinued in connection with Project Fuel, which were recorded in “Selling, general and administrative expenses” in the consolidated statements of income. The Company also recorded an impairment charge of $9.1 million related to the Beyond Yoga® customer relationship intangible assets, which is included in “Goodwill and other intangible asset impairment charges” in the Company’s consolidated statements of income. See Note 3 for additional information.
Supplier Finance Program
The Company offers a supplier financing program which enables the Company’s suppliers, at their sole discretion, to sell their receivables (i.e., the Company’s payment obligations to suppliers) to a financial institution on a non-recourse basis in order to be paid earlier than current payment terms provide.
The Company’s obligations to its suppliers, including amounts due and scheduled payment dates, are not impacted by the supplier’s participation in these arrangements. The Company’s payment terms to the financial institutions, including the timing and amount of payments, are based on the original supplier invoices. Our current payment terms with a majority of our suppliers are typically 90 days. The Company has not pledged any assets and does not provide guarantees under the supplier finance program. As such, the outstanding payment obligations under the Company’s supplier finance program are included within Accounts Payable in the Consolidated Balance Sheets.
The Company’s outstanding payment obligations under this program were $150.6 million as of August 31, 2025 and $152.2 million as of December 1, 2024.
10
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
Share Repurchases
During the first quarter of 2025, the Company repurchased 1.6 million shares for $30.0 million, plus broker’s commissions, in the open market. On August 1, 2025, the Company entered into an accelerated share repurchase transaction with a third-party financial institution to repurchase an aggregate of $120.0 million of the Company’s Class A common stock as part of its share repurchase program. At inception, the Company made an initial payment of $120.0 million and took delivery of approximately 5.0 million shares of Class A common stock, representing 80% of the dollar amount of the transaction, based on the August 1, 2025 closing share price, over the transaction's term (the "ASR Agreement"). The initial shares received, which had an aggregate cost of $96.0 million based on the August 1, 2025 closing share price, were retired and recorded as a reduction of Retained Earnings, with the remainder of $24.0 million recorded as a reduction of additional paid-in capital. These purchases equate to an average repurchase price of approximately $19.05 per share for the nine months ended August 31, 2025. The total number of shares the Company will ultimately repurchase will be based on the volume-weighted average price per share of the Company's Class A common stock over the term of the ASR Agreement, less an agreed upon discount, and subject to customary adjustments pursuant to the terms and conditions of the ASR Agreement. Final settlement of the transactions under the ASR Agreement is expected to occur no later than the first quarter of 2026.
During the three and nine months ended August 25, 2024, the Company repurchased 1.0 million and 3.3 million shares for $17.8 million and $59.7 million, plus broker's commissions, respectively, in the open market. This equates to an average repurchase price of approximately $18.35 per share for the nine months ended August 25, 2024.
The Company accounts for share repurchases by charging the excess of the repurchase price over the repurchased Class A common stock’s par value entirely to retained earnings. All repurchased shares are retired and become authorized but unissued shares. The Company accrues for the shares purchased under the share repurchase plan based on the trade date. The Company may terminate or limit the share repurchase program at any time.
Assets Held for Sale and Discontinued Operations
Assets and liabilities of a business that meet the accounting requirements to be classified as held for sale are separated in a disposal group. Disposal group net assets are recorded at the lower of their carrying amount or estimated fair value less expected costs to sell. After being classified as held for sale, assets are not depreciated or amortized.
Assets and liabilities of a disposal group that meet the accounting requirements to be classified as discontinued operations are presented separately for all current and prior periods in the consolidated balance sheets. The results of discontinued operations are reported in income (loss) from discontinued operations, net of taxes in the consolidated statements of income for the current and prior periods beginning in the period in which the business meets the held for sale criteria. Income (loss) from discontinued operations includes direct costs attributable to the business held for sale, and an estimate of costs from corporate functions dedicated to the business, but excludes corporate expenses composed of selling, general and administrative expenses not attributable to any of the operating segments. See Note 2 “Discontinued Operations”.
Unless otherwise indicated, the information in the notes to the consolidated financial statements refers only to the Company’s continuing operations.
Reclassification
Certain amounts on the consolidated balance sheets, consolidated statements of income and statements of cash flows have been conformed to the August 31, 2025 presentation.
Recently Issued Accounting Standards
11
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
NOTE 2: DISCONTINUED OPERATIONS
In the fourth quarter of 2024 the Company announced it had initiated a formal review of strategic alternatives to the global Dockers® brand, which could include a sale or other strategic transactions. During the first quarter of 2025, the Company commenced a sale process of its Dockers® business and the Company determined that the Dockers® business met held for sale and discontinued operations accounting criteria. During the second quarter of 2025, the Company entered into a definitive agreement to sell its Dockers® business for an initial transaction value of $311 million, subject to customary adjustments and closing conditions, with the potential to reach up to $391 million through an $80 million earnout opportunity in future years based on the performance of the Dockers® business. On July 31, 2025 the Company sold the Dockers® intellectual property and operations in the U.S. and Canada for gross proceeds of $194.7 million, resulting in a gain on sale of $139.0 million, net of direct costs to sell. The sale of the remaining Dockers® operations is expected to close on or around January 31, 2026.
Under the terms of a transition services agreement, the Company will provide certain post-closing accounting, tax, digital technology and supply chain services for Dockers® operations in the U.S. and Canada for a transitional period generally ending on January 31, 2026. Fees earned under the transition services agreement are included in “Selling, general and administrative expenses” in the consolidated statements of income.
The following table reconciles the gross proceeds with the gain on sale of Dockers® intellectual property and operations in the U.S. and Canada included in “Net income (loss) from discontinued operations, net of taxes”.
| Three Months Ended | |||||
| August 31, 2025 | |||||
| Gross proceeds | $ | ||||
Less direct costs to sell | |||||
Less carrying amount of Dockers® intellectual property and operations in the U.S. and Canada | |||||
Gain on sale of Dockers® intellectual property and operations in the U.S. and Canada | $ | ||||
Dockers® net assets were classified as held for sale in the consolidated balance sheets for all periods presented. The Dockers® net assets were classified as current and non-current. Additionally, the Company classified the Dockers® business as discontinued operations in its consolidated statements of income for all periods presented.
The following table presents the assets and liabilities held for sale:
| August 31, 2025 | December 1, 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Current Assets: | |||||||||||
| Inventories | $ | $ | |||||||||
| Total current assets held for sale | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Operating lease right-of-use assets, net | |||||||||||
| Total non-current assets held for sale | |||||||||||
| Total assets held for sale | $ | $ | |||||||||
| Current Liabilities: | |||||||||||
| Short-term operating lease liabilities | $ | $ | |||||||||
| Total current liabilities held for sale | |||||||||||
| Long-term operating lease liabilities | |||||||||||
| Total long-term liabilities held for sale | |||||||||||
| Total liabilities held for sale | $ | $ | |||||||||
12
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
The following table presents the results of discontinued operations:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | August 31, 2025 | August 25, 2024 | ||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||
| Net revenues | $ | $ | $ | $ | |||||||||||||||||||
| Cost of goods sold | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
Restructuring charges, net(1) | |||||||||||||||||||||||
Income (loss) from discontinued operations before income taxes and gain on sale | ( | ( | ( | ( | |||||||||||||||||||
Gain on sale of Dockers® intellectual property and operations in the U.S. and Canada before income taxes | |||||||||||||||||||||||
Total income (loss) from discontinued operations before income taxes | ( | ( | |||||||||||||||||||||
Income tax expense (benefit) | ( | ( | |||||||||||||||||||||
Net income (loss) from discontinued operations, net of taxes | $ | $ | ( | $ | $ | ( | |||||||||||||||||
____________
(1)Restructuring charges, net amounts previously attributable to corporate expenses were reported as discontinued operations for the nine months ended August 25, 2024.
Cash flows related to discontinued operations are included in the consolidated statements of cash flows. The gain on sale of Dockers® intellectual property and operations in the U.S. and Canada of $155.6 million, prior to costs to sell, was an adjustment to reconcile net income to net cash provided by operating activities and the proceeds from sale of $194.7 million were included in cash flows from investing activities. There were no other significant operating noncash items or investing activities cash flows from discontinued operations during the three and nine months ended August 31, 2025 and August 25, 2024.
13
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
NOTE 3: GOODWILL AND OTHER INTANGIBLE ASSETS
The changes in the carrying amount of goodwill by business segment for the nine months ended August 31, 2025 and August 25, 2024 were as follows:
| Nine Months Ended August 31, 2025 | |||||||||||||||||||||||||||||
| Americas | Europe | Asia | Other Brands(1) | Total | |||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
Balance, December 1, 2024 | |||||||||||||||||||||||||||||
| Goodwill | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Accumulated impairment losses | ( | ( | ( | ||||||||||||||||||||||||||
| Impairment losses | ( | ( | |||||||||||||||||||||||||||
| Goodwill acquired during the year | |||||||||||||||||||||||||||||
| Foreign currency fluctuation | |||||||||||||||||||||||||||||
Balance, August 31, 2025 | |||||||||||||||||||||||||||||
| Goodwill | |||||||||||||||||||||||||||||
| Accumulated impairment losses | ( | ( | ( | ( | |||||||||||||||||||||||||
| $ | $ | $ | $ | $ | |||||||||||||||||||||||||
(1)Comprised of the Beyond Yoga® reporting unit goodwill only.
| Nine Months Ended August 25, 2024 | |||||||||||||||||||||||||||||
| Americas | Europe | Asia | Other Brands(1) | Total | |||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
Balance, November 26, 2023 | |||||||||||||||||||||||||||||
Goodwill | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Accumulated impairment losses | ( | ( | ( | ||||||||||||||||||||||||||
Impairment losses(2) | ( | ( | ( | ||||||||||||||||||||||||||
Goodwill acquired during the year(3) | |||||||||||||||||||||||||||||
| Foreign currency fluctuation | ( | ( | |||||||||||||||||||||||||||
Balance, August 25, 2024 | |||||||||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||||||||
Accumulated impairment losses | ( | ( | ( | ||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | |||||||||||||||||||||||||
(1)Comprised of the Beyond Yoga® reporting unit goodwill only.
(2)For the nine months ended August 25, 2024 the Company recorded a Beyond Yoga® goodwill noncash impairment charge of $36.3
(3)For the nine months ended August 25, 2024 the Company recorded goodwill of $15.9 million in connection with the acquisition of all operating assets related to Levi’s® brands from Expofaro S.A.S, the Company’s former distributor in Colombia.
14
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
During the third quarter of 2025, as part of the Company’s annual review of the Beyond Yoga® reporting unit, the Company elected to perform a single step quantitative impairment test on the goodwill and indefinite lived trademark intangible assigned to the Beyond Yoga® reporting unit. The Company engaged third-party valuation specialists and used industry accepted valuation models and criteria that were reviewed and approved by various levels of management. The Company assessed the fair value of the Beyond Yoga® reporting unit using the discounted cash flow method under the income approach, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows. The trademark fair value was determined using the relief-from-royalty method to utilize the discounted projected future cash flows. Although the fair values of the Beyond Yoga® reporting unit and the indefinite lived trademark intangible exceeded their carrying values, the fair values of the Beyond Yoga® reporting unit and the indefinite lived trademark intangible were less than 10% over their carrying values.
The significant assumptions used in the assessment of the fair value of the reporting unit included revenue growth rates, profit margins, operating expenses, capital expenditures, terminal value and a discount rate. The significant assumptions used in the assessment of the fair value of the trademark intangible asset included revenue growth rates, a discount rate and a royalty rate. As our long-term strategies change, planned business performance expectations are not met over time, or specific valuation factors outside of our control, such as discount rates, change significantly, then the estimated fair values of the Beyond Yoga® reporting unit, the Beyond Yoga® indefinite-lived trademark intangible asset, or both might decline and lead to impairment charges in the future. Several factors could impact the Beyond Yoga® brand's ability to achieve expected future cash flows, including the success of retail store and international expansion, store and e-commerce productivity, the impact of promotional activity, continued economic volatility and potential operational challenges related to macroeconomic factors and other strategic initiatives to drive increased profitability.
During the third quarter of 2024, as part of the Company’s annual review of the Beyond Yoga® reporting unit, the Company elected to perform a single step quantitative impairment test on the goodwill and indefinite lived trademark intangible assigned to the Beyond Yoga® reporting unit and performed impairment tests on the related customer relationship intangible assets. The Company engaged third-party valuation specialists and used industry accepted valuation models and criteria that were reviewed and approved by various levels of management. The Company assessed the fair value of the Beyond Yoga® reporting unit as of the test date, May 27, 2024, using the discounted cash flow method under the income approach, utilizing estimated cash flows and a terminal value, discounted at a rate of return that reflects the relative risk of the cash flows. As a result of this assessment, we concluded that the carrying value of the Beyond Yoga® reporting unit exceeded the estimated fair value by $36.3 million, which was recorded as a noncash impairment charge to goodwill.
Prior to the assessment of the reporting unit, we concluded that the carrying values of the trademark and customer relationship intangible assets exceeded their estimated fair values. The trademark fair value was determined using the relief-from-royalty method to utilize the discounted projected future cash flows. Based on this assessment, we recorded a $66.0 million noncash impairment charge related to the Beyond Yoga® trademark. The customer relationship intangible assets fair values were determined using the multi-period excess earnings and distributor methods under the income approach. Based on these assessments, we recorded a $9.1 million noncash impairment charge related to the customer relationship intangible assets.
The significant assumptions used in the assessment of the fair value of the reporting unit included revenue growth rates, profit margins, operating expenses, capital expenditures, terminal value and a discount rate. The significant assumptions used in the assessment of the fair value of the trademark intangible asset included revenue growth rates, a discount rate and a royalty rate. The significant assumptions used in the assessment of the customer relationship intangible assets included revenues from existing customers and discount rates.
Total impairment charges for the nine months ended August 25, 2024 were $111.4 million and were recorded within “Goodwill and other intangible asset impairment charges” on the accompanying consolidated statements of income. During 2024, the Company appointed new Beyond Yoga® executive management and implemented a new strategic plan for growth and expansion, resulting in an adverse impact on expected cash flows.
During the first quarter of 2024, the Company recognized $5.5 million in goodwill impairment charges related to the footwear business in its Europe segment as a result of the decision to discontinue the category in connection with Project Fuel.
15
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
The following table presents the Company’s other intangible assets, net:
| August 31, 2025 | December 1, 2024 | ||||||||||||||||||||||||||||||||||
| Gross Carrying Value | Accumulated Amortization | Total | Gross Carrying Value | Accumulated Amortization | Total | ||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||
| Non-amortized intangible assets: | |||||||||||||||||||||||||||||||||||
Trademarks (1) | $ | $ | — | $ | $ | $ | — | $ | |||||||||||||||||||||||||||
| Amortized intangible assets: | |||||||||||||||||||||||||||||||||||
Customer relationships and other (2) | ( | ( | |||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
_____________
(1)For the year ended December 1, 2024 the Company recorded a Beyond Yoga® trademark noncash impairment charge of $66.0 million based on a Level 3 fair value of $135.1 million.
(2)For the year ended December 1, 2024 the Company recorded a Beyond Yoga® customer relationship intangible assets noncash impairment charge of $9.1 million based on a Level 3 fair value of $9.7 million.
16
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
NOTE 4: FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table presents the Company’s financial instruments that are carried at fair value:
| August 31, 2025 | December 1, 2024 | ||||||||||||||||||||||||||||||||||
| Fair Value Estimated Using | Fair Value Estimated Using | ||||||||||||||||||||||||||||||||||
| Fair Value | Level 1 Inputs(1) | Level 2 Inputs(2) | Fair Value | Level 1 Inputs(1) | Level 2 Inputs(2) | ||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||
| Financial assets carried at fair value | |||||||||||||||||||||||||||||||||||
| Rabbi trust assets | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Short-term investments in marketable securities | |||||||||||||||||||||||||||||||||||
Derivative instruments(3) | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Financial liabilities carried at fair value | |||||||||||||||||||||||||||||||||||
Derivative instruments(3) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
_____________
(1)Fair values estimated using Level 1 inputs are inputs which consist of quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Rabbi trust assets consist of marketable equity securities.
(2)Fair values estimated using Level 2 inputs are inputs, other than quoted prices, that are observable for the asset or liability, either directly or indirectly, and include among other things, quoted prices for similar assets or liabilities in markets that are active or inactive as well as inputs other than quoted prices that are observable. Short-term investments in marketable securities consist of fixed income securities. For forward foreign exchange contracts, inputs include foreign currency exchange and interest rates and, where applicable, credit default swap prices.
The following table presents the carrying value, including related accrued interest, and estimated fair value of the Company’s financial instruments that are carried at adjusted historical cost:
| August 31, 2025 | December 1, 2024 | ||||||||||||||||||||||
| Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Financial liabilities carried at adjusted historical cost | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
| Short-term borrowings | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
_____________
(1)Fair values are estimated using Level 2 inputs and incorporate mid-market price quotes. Level 2 inputs are inputs other than quoted prices, that are observable for the liability, either directly or indirectly and include among other things, quoted prices for similar liabilities in markets that are active or inactive as well as inputs other than quoted prices that are observable.
17
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
NOTE 5: DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
As of August 31, 2025, the Company had forward foreign exchange contracts derivatives to buy $578.1 million and to sell $491.0 million in various foreign currencies. These contracts are at various exchange rates and expire at various dates through February 2027.
The table below provides data about the carrying values of derivative and non-derivative instruments:
| August 31, 2025 | December 1, 2024 | ||||||||||||||||||||||||||||||||||
| Assets | (Liabilities) | Derivative Net Carrying Value | Assets | (Liabilities) | Derivative Net Carrying Value | ||||||||||||||||||||||||||||||
| Carrying Value | Carrying Value | Carrying Value | Carrying Value | ||||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments | |||||||||||||||||||||||||||||||||||
Foreign exchange risk cash flow hedges(1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Foreign exchange risk cash flow hedges(2) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||||||||||||||||||
Forward foreign exchange contracts(1) | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Forward foreign exchange contracts(2) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
Non-derivatives designated as hedging instruments | |||||||||||||||||||||||||||||||||||
| $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| ( | |||||||||||||||||||||||||||||||||||
_____________
(1)Included in “Other current assets” or “Other non-current assets” on the Company’s consolidated balance sheets.
(2)Included in “Other accrued liabilities” or “Long-term employee related benefits and other liabilities” on the Company’s consolidated balance sheets.
The Company’s over-the-counter forward foreign exchange contracts are subject to International Swaps and Derivatives Association, Inc. master agreements. These agreements permit the net settlement of these contracts on a per-institution basis; however, the Company records the fair value on a gross basis on its consolidated balance sheets based on maturity dates, including those subject to master netting arrangements.
18
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
The table below presents the gross and net amounts of these contracts recognized on the Company’s consolidated balance sheets by type of financial instrument:
| August 31, 2025 | December 1, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Gross Amounts of Assets / (Liabilities) Presented in the Balance Sheet | Gross Amounts Not Offset in the Balance Sheet | Net Amounts of Assets / (Liabilities) | Gross Amounts of Assets / (Liabilities) Presented in the Balance Sheet | Gross Amounts Not Offset in the Balance Sheet | Net Amounts of Assets / (Liabilities) | |||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange risk contracts and forward foreign exchange contracts | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial assets | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
| Financial liabilities | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||
The table below provides data about the amount of gains and losses related to derivative instruments and non-derivative instruments designated as cash flow and net investment hedges included in “Accumulated other comprehensive loss” (“AOCL”) on the Company’s consolidated balance sheets, and in “Other income (expense), net” in the Company’s consolidated statements of income:
Amount of (Loss) Gain Recognized in AOCL (Effective Portion) | Amount of (Loss) Gain Reclassified from AOCL into Net Income(1) | ||||||||||||||||||||||||||||||||||
As of August 31, 2025 | As of December 1, 2024 | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | August 31, 2025 | August 25, 2024 | ||||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||
| Foreign exchange risk contracts | $ | ( | $ | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Realized forward foreign exchange swaps(2) | |||||||||||||||||||||||||||||||||||
| Yen-denominated Eurobonds | ( | ( | |||||||||||||||||||||||||||||||||
| Euro-denominated senior notes | ( | ( | |||||||||||||||||||||||||||||||||
| Cumulative income taxes | |||||||||||||||||||||||||||||||||||
| Total | $ | ( | $ | ( | |||||||||||||||||||||||||||||||
_____________
(1)Amounts reclassified from AOCL were classified as net revenues or costs of goods sold on the consolidated statements of income.
(2)Prior to 2006, the Company used foreign exchange currency swaps to hedge the net investment in its foreign operations. For hedges that qualified for hedge accounting, the net gains were included in AOCL and are not reclassified to earnings until the related net investment position has been liquidated.
There was no hedge ineffectiveness for the nine months ended August 31, 2025. Within the next 12 months, a $26.5 million loss from cash flow hedges is expected to be reclassified from AOCL into net income.
19
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
The table below presents the effects of the Company’s cash flow hedges of foreign exchange risk contracts on the consolidated statements of income:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | August 31, 2025 | August 25, 2024 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
Amount of (Loss) Gain on Cash Flow Hedge Activity: | |||||||||||||||||||||||
| Net revenues | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
| Cost of goods sold | $ | $ | $ | $ | ( | ||||||||||||||||||
The table below provides data about the amount of gains and losses related to derivative instruments included in “Other income (expense), net” in the Company’s consolidated statements of income:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | August 31, 2025 | August 25, 2024 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
Forward foreign exchange contracts: | |||||||||||||||||||||||
Realized (loss) gain(1) | $ | $ | ( | $ | $ | ||||||||||||||||||
Unrealized (loss) gain | ( | ( | |||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ||||||||||||||||||
(1)The realized gain (loss) is included in “Other, net” under cash flows from operating activities on the Company’s consolidated statements of cash flows.
NOTE 6: OTHER ACCRUED LIABILITIES
The following table presents the Company’s other accrued liabilities:
| August 31, 2025 | December 1, 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Other accrued liabilities | |||||||||||
| Accrued non-trade payables | $ | $ | |||||||||
| Accrued advertising and promotion | |||||||||||
| Taxes other than income taxes payable | |||||||||||
| Restructuring liabilities | |||||||||||
| Accrued income taxes | |||||||||||
| Accrued property, plant and equipment | |||||||||||
| Fair value derivatives | |||||||||||
| Accrued rent | |||||||||||
| Accrued interest payable | |||||||||||
| Short-term debt | |||||||||||
| Other | |||||||||||
| Total other accrued liabilities | $ | $ | |||||||||
20
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
NOTE 7: DEBT
The following table presents the Company’s debt:
| August 31, 2025 | December 1, 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Long-term debt | |||||||||||
| $ | $ | ||||||||||
| Total long-term debt | $ | $ | |||||||||
| Short-term debt | |||||||||||
| Short-term borrowings | |||||||||||
| Total debt | $ | $ | |||||||||
Senior Revolving Credit Facility
As of August 31, 2025, the Company had no borrowings under the Credit Facility. The Company’s unused availability under the Credit Facility was $743.1 million at August 31, 2025, as the total availability of $762.1 million was reduced by $19.0 million of letters of credit and other credit usage allocated under the Credit Facility.
Interest Rates on Borrowings
The Company’s weighted-average interest rate on average borrowings outstanding during the three and nine months ended August 31, 2025 was 4.43 % and 4.32 %, respectively, as compared to 3.97 % and 3.98 %, respectively, during the same periods of 2024.
Issuance of Senior Notes due 2030 and Redemption of Senior Notes due 2027
In July 2025, the Company issued €475.0 million in aggregate principal amount of 4.000 % senior notes due 2030 (the “Senior Notes due 2030”) to qualified institutional buyers and to purchasers outside the U.S. The Company used the net proceeds of the Notes, together with cash on hand, to redeem all €475.0 million in aggregate principal amount of its outstanding 3.375 % Senior Notes due 2027.
Principal, interest and maturity. The Senior Notes due 2030 will mature on August 15, 2030. Interest on the Senior Notes due 2030 is payable semi-annually in arrears on February 15 and August 15.
Ranking. The Senior Notes due 2030 are not guaranteed by any of the Company's subsidiaries and are unsecured obligations. Accordingly, they:
•rank equal in right of payment with all of the Company's other existing and future unsecured and unsubordinated debt;
•rank senior in right of payment to the Company's future debt and other obligations that are, by their terms, expressly subordinated in right of payment to the Senior Notes due 2030;
•are effectively subordinated in right of payment to all of the Company's existing and future senior secured debt and other obligations (including the Credit Facility) to the extent of the value of the collateral securing such debt; and
•are structurally subordinated to all obligations of each of the Company's subsidiaries.
Optional redemption. The Company may redeem some or all of the Senior Notes due 2030, at once or over time, at redemption prices specified in the indenture governing the Senior Notes due 2030 (the “2030 indenture”), plus accrued and unpaid interest, if any, to the date of redemption.
21
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
Mandatory redemption, offer to purchase and open market purchases. The Company is not required to make any sinking fund payments with respect to the Senior Notes due 2030. However, under certain circumstances as described under “Change of control” below, the Company may be required to offer to purchase the Senior Notes due 2030. The Company may from time to time purchase the Senior Notes due 2030 in the open market or otherwise.
Covenants. The 2030 indenture contains covenants that limit, among other things, the Company’s ability to incur liens, enter into sale and leaseback transactions and merge or consolidate with another person. The 2030 indenture also limits the ability of the Company’s subsidiaries to incur additional debt, incur liens and enter into sale and leaseback transactions. The 2030 indenture provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, breach of covenants, payment defaults or acceleration of certain other indebtedness, a failure to pay certain judgments and certain events of bankruptcy and insolvency. Generally, if an event of default occurs, the trustee under the 2030 indenture or the holders of at least 25 % in aggregate principal amount of the then outstanding Senior Notes due 2030 may declare all the Senior Notes due 2030 to be due and payable immediately. As of August 31, 2025, the Company was in compliance with these covenants.
Change of control. Upon the occurrence of a change of control triggering event (as defined in the 2030 indenture), each holder of the Senior Notes due 2030 may require the Company to repurchase all or a portion of the Senior Notes due 2030 in cash at a price equal to 101 % of the principal amount of the Senior Notes due 2030 to be repurchased, plus accrued and unpaid interest, if any, to the date of purchase.
NOTE 8: RESTRUCTURING ACTIVITIES
In the first quarter of 2024, the Company’s Board of Directors (the "Board") approved a multi-year global productivity initiative, “Project Fuel”, designed to accelerate the execution of our Brand Led and DTC First strategies while fueling long-term profitable growth. The first phase of the global productivity initiative was completed primarily in the first half of 2024. The two-year initiative is expected to continue through the end of 2025. As this initiative progresses, the Company may incur additional restructuring charges, which could be significant to a future fiscal quarter or year.
For the three and nine months ended August 31, 2025, the Company recognized restructuring charges of $8.6 million and $22.1 million, respectively, in connection with Project Fuel, consisting primarily of severance and other post-employment benefits, based on separation benefits provided by Company policy or statutory benefit plans as well as contract termination costs and asset impairments partially offset by a gain on the sale of a previously closed distribution center. These charges were recorded in “Restructuring charges, net” in the consolidated statements of income. As of August 31, 2025, the restructuring liability was $81.7 million, with $64.7 million and $17.0 million classified as “Other accrued liabilities” and “Long-term employee related benefits and other liabilities”, respectively, within the Company’s consolidated balance sheet.
The Company also recognized $4.3 million and $11.8 million of restructuring related charges during the three and nine months ended August 31, 2025, respectively, primarily consisting of consulting costs, distribution center transition costs, and employee one-time incentives, which were recorded in “Selling, general and administrative expenses” in the consolidated statements of income.
22
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
For the three and nine months ended August 25, 2024, the Company recognized restructuring charges of $3.4 million and $171.6 million, respectively, consisting primarily of severance and other post-employment benefits, based on separation benefits provided by Company policy or statutory benefit plans. These charges were recorded in “Restructuring charges, net” in the consolidated statements of income.
The Company also recognized $19.0 million and $34.3 million of restructuring related charges during the three and nine months ended August 25, 2024, respectively, consisting primarily of consulting fees which were recorded in “Selling general and administrative expenses” in the consolidated statements of income. Additionally, the Company recognized an impairment charge of $11.1 million in the third quarter of 2024 related to capitalized internal-use software as a result of the decision to discontinue certain technology projects in connection with Project Fuel which was recorded in “Selling, general and administrative expenses” in the consolidated statements of income.
The following tables summarize the activities associated with restructuring liabilities for the periods presented. "Net Charges (Reversals)" represents the initial charge related to the restructuring activity as well as revisions of estimates related to severance and employee-related benefits and other, "Payments" consists of cash payments for severance and employee-related benefits and other, and "Foreign Currency Fluctuations" includes foreign currency fluctuations.
| Three Months Ended August 31, 2025 | |||||||||||||||||||||||||||||||||||
| Liabilities | Net Charges (Reversals)(1) | Payments | Foreign Currency Fluctuations | Liabilities | |||||||||||||||||||||||||||||||
| June 1, 2025 | August 31, 2025 | ||||||||||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||||||||
Severance and employee-related benefits | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Contract termination costs and other | ( | ( | |||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
_____________
(1)Excludes $4.0 million in stock compensation related charges recorded in Additional paid-in capital. Includes $8.6 million of Dockers® restructuring costs reported as discontinued operations
| Nine Months Ended August 31, 2025 | |||||||||||||||||||||||||||||||||||
| Liabilities | Net Charges (Reversals)(1) | Payments | Foreign Currency Fluctuations | Liabilities | |||||||||||||||||||||||||||||||
| December 1, 2024 | August 31, 2025 | ||||||||||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||||||||
Severance and employee-related benefits | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Contract termination costs and other | ( | ||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
_____________
(1)Excludes $5.3 million in stock compensation related charges recorded in Additional paid-in capital, $9.2 million of asset impairment charges in connection with the closures of distribution centers, partially offset by a $9.3 million gain on the sale of a previously closed distribution center. Includes $11.8 million of Dockers® restructuring costs reported as discontinued operations.
| Three Months Ended August 25, 2024 | |||||||||||||||||||||||||||||||||||
| Liabilities | Net Charges (Reversals) | Payments | Foreign Currency Fluctuations | Liabilities | |||||||||||||||||||||||||||||||
| May 26, 2024 | August 25, 2024 | ||||||||||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||||||||
Severance and employee-related benefits | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Contract termination costs and other | ( | ||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
23
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
| Nine Months Ended August 25, 2024 | |||||||||||||||||||||||||||||||||||
| Liabilities | Net Charges (Reversals)(1) | Payments | Foreign Currency Fluctuations | Liabilities | |||||||||||||||||||||||||||||||
| November 26, 2023 | August 25, 2024 | ||||||||||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||||||||
Severance and employee-related benefits | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Contract termination costs and other | ( | ||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
_____________
(1)Excludes $2.0 million in stock compensation related charges recorded in Additional paid-in capital and $0.8 million in operating lease termination. Includes $3.1 million of Dockers® restructuring costs reported as discontinued operations.
NOTE 9: COMMITMENTS AND CONTINGENCIES
Forward Foreign Exchange Contracts
The Company uses over-the-counter derivative instruments to manage its exposure to foreign currencies. The Company is exposed to credit loss in the event of nonperformance by the counterparties to the forward foreign exchange contracts. However, the Company believes that its exposures are appropriately diversified across counterparties and that these counterparties are creditworthy financial institutions. See Note 5 for additional information.
Other Contingencies
Litigation. In the ordinary course of business, the Company has various claims, complaints and pending cases, including contractual matters, facility and employee-related matters, distribution matters, product liability matters, intellectual property matters, bankruptcy preference matters, and tax and administrative matters. The Company establishes loss provisions for these ordinary course claims as well as other matters in which losses are probable and can be reasonably estimated. The Company does not believe any of these pending claims, complaints and legal proceedings will have a material impact on its financial condition, results of operations or cash flows.
Customs Duty Audits. The Company imports both raw materials and finished garments into all of its geographic regions and, as such, is subject to numerous countries’ complex customs laws and regulations with respect to its import and export activity. The Company has various pending audit assessments in connection with these activities. As of August 31, 2025, the Company has recorded certain reserves for these matters which are not material. The Company does not believe any of the claims for customs duty and related charges will have a material impact on its financial condition, results of operations or cash flows.
NOTE 10: DIVIDENDS
Dividends are declared at the discretion of the Board. In January, April, and July 2025, the Company declared cash dividends of $0.13 , $0.13 , and $0.14 per share, respectively, to holders of record of its Class A and Class B common stock. In January, April, and July 2024, the Company declared cash dividends of $0.12 , $0.12 , and $0.13 per share, respectively, to holders of record of its Class A and Class B common stock. During the three and nine months ended August 31, 2025, dividends were paid in the amount of $55.4 million and $158.2 million respectively, compared to $51.5 million and $147.1 million, respectively, for the same prior-year period.
The Company does not have an established dividend policy. The Board reviews the Company’s ability to pay dividends on an ongoing basis and establishes the dividend amount based on the Company’s financial condition, results of operations, capital requirements, current and projected cash flows and other factors, and any restrictions related to the terms of the Company’s debt agreements.
24
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
Subsequent to the Company’s quarter end, the Board declared a cash dividend of $0.14 per share to holders of record of its Class A and Class B common stock at the close of business on October 20, 2025, for a total quarterly dividend of approximately $55 million.
NOTE 11: ACCUMULATED OTHER COMPREHENSIVE LOSS
The following is a summary of the components of "Accumulated other comprehensive loss," net of related income taxes:
| Three Months Ended August 31, 2025 | |||||||||||||||||||||||||||||
Pension and Postretirement Benefits(1) | Translation Adjustments | Unrealized (Loss) Gain on Marketable Securities | |||||||||||||||||||||||||||
Derivative Instruments(2) | Foreign Currency Translation | Total | |||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
Accumulated other comprehensive loss at June 1, 2025 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Other comprehensive (loss) income before reclassifications | ( | ( | |||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | ( | ( | |||||||||||||||||||||||||||
| Net increase (decrease) in other comprehensive (loss) income | ( | ||||||||||||||||||||||||||||
Accumulated other comprehensive (loss) income at August 31, 2025 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Nine Months Ended August 31, 2025 | |||||||||||||||||||||||||||||
Pension and Postretirement Benefits(1) | Translation Adjustments | Unrealized (Loss) Gain on Marketable Securities | |||||||||||||||||||||||||||
Derivative Instruments(2) | Foreign Currency Translation | Total | |||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
Accumulated other comprehensive loss at December 1, 2024 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Other comprehensive (loss) income before reclassifications | ( | ( | $ | ||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | ( | $ | ( | ||||||||||||||||||||||||||
| Net increase (decrease) in other comprehensive (loss) income | ( | ||||||||||||||||||||||||||||
Accumulated other comprehensive (loss) income at August 31, 2025 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
(1)Amounts reclassified were recorded in “Other income (expense), net”.
(2)Amounts reclassified were recorded within “Net revenues” and “Cost of goods sold”. For more information, refer to Note 5.
25
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
| Three Months Ended August 25, 2024 | |||||||||||||||||||||||
Pension and Postretirement Benefits(1) | Translation Adjustments | ||||||||||||||||||||||
Derivative Instruments(2) | Foreign Currency Translation | Total | |||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
Accumulated other comprehensive loss at May 26, 2024 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive (loss) income before reclassifications | ( | ( | ( | ( | |||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | |||||||||||||||||||||||
| Net increase (decrease) in other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
Accumulated other comprehensive loss at August 25, 2024 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Nine Months Ended August 25, 2024 | |||||||||||||||||||||||
Pension and Postretirement Benefits(1) | Translation Adjustments | ||||||||||||||||||||||
Derivative Instruments(2) | Foreign Currency Translation | Total | |||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
Accumulated other comprehensive loss at November 26, 2023 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive (loss) income before reclassifications | ( | ( | ( | ( | |||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | |||||||||||||||||||||||
| Net increase (decrease) in other comprehensive (loss) income | ( | ( | |||||||||||||||||||||
Accumulated other comprehensive loss at August 25, 2024 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
(1)Amounts reclassified were recorded in “Other income (expense), net”.
(2)Amounts reclassified were recorded within “Net revenues” and “Cost of goods sold”. For more information, refer to Note 5.
26
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
NOTE 12: NET REVENUES
Disaggregated Revenue
The table below provides the Company’s revenues disaggregated by segment and channel.
| Three Months Ended August 31, 2025 | |||||||||||||||||||||||||||||
| Levi’s Brands | |||||||||||||||||||||||||||||
| Americas | Europe | Asia | Beyond Yoga® | Total | |||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
| Net revenues by channel: | |||||||||||||||||||||||||||||
| Wholesale | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Direct-to-consumer | |||||||||||||||||||||||||||||
| Total net revenues | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Nine Months Ended August 31, 2025 | |||||||||||||||||||||||||||||
| Levi’s Brands | |||||||||||||||||||||||||||||
| Americas | Europe | Asia | Beyond Yoga® | Total | |||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||
| Net revenues by channel: | |||||||||||||||||||||||||||||
| Wholesale | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Direct-to-consumer | |||||||||||||||||||||||||||||
| Total net revenues | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Three Months Ended August 25, 2024 | |||||||||||||||||||||||||||||
| Levi’s Brands | |||||||||||||||||||||||||||||
| Americas | Europe | Asia | Beyond Yoga® | Total | |||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
| Net revenues by channel: | |||||||||||||||||||||||||||||
| Wholesale | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Direct-to-consumer | |||||||||||||||||||||||||||||
| Total net revenues | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Nine Months Ended August 25, 2024 | |||||||||||||||||||||||||||||
| Levi’s Brands | |||||||||||||||||||||||||||||
| Americas | Europe | Asia | Beyond Yoga® | Total | |||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||
| Net revenues by channel: | |||||||||||||||||||||||||||||
| Wholesale | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Direct-to-consumer | |||||||||||||||||||||||||||||
| Total net revenues | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
27
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
NOTE 13: OTHER INCOME (EXPENSE), NET
The following table summarizes significant components of “Other income (expense), net”:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | August 31, 2025 | August 25, 2024 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
Foreign exchange management gains (losses)(1) | $ | $ | ( | $ | $ | ||||||||||||||||||
Foreign currency transaction losses(2) | ( | ( | ( | ( | |||||||||||||||||||
| Other, net | |||||||||||||||||||||||
Total other income (expense), net | $ | $ | ( | $ | $ | ( | |||||||||||||||||
____________
(1)Gains on forward foreign exchange contracts primarily result from currency fluctuations relative to negotiated contract rates. For the three and nine months ended August 31, 2025, gains were primarily due to currency fluctuations relative to negotiated contract rates on positions to buy the Euro.
(2)Foreign currency transaction gains and losses reflect the impact of currency fluctuations on the Company's foreign currency denominated balances. For the three and nine months ended August 31, 2025, losses were primarily due to the impact of U.S. dollar weakening against the Euro.
NOTE 14: INCOME TAXES
The Company’s effective income tax rate was 21.9 % for the three months ended August 31, 2025, compared to (1.9 )% for the same prior-year period. The increase in the effective tax rate in the current quarter is primarily due to lower earnings before tax in the prior year.
The Company’s effective income tax rate was 21.5 % for the nine months ended August 31, 2025, compared to (39.3 )% for the same prior-year period. The increase in the effective tax rate is primarily due to lower earnings before tax in the prior year, and a $10.1 million tax benefit related to favorable resolutions of state audits.
The Organization for Economic Cooperation and Development reached agreement among over 140 countries to implement a minimum 15% tax rate on certain multinational enterprises, commonly referred to as Pillar Two. Many countries continue to announce changes in their tax laws and regulations based on the Pillar Two framework. The Company determined that Pillar Two did not have a material impact to our tax provision for the three and nine months ended August 31, 2025. We will continue to evaluate the impact of legislative changes as additional guidance becomes available.
28
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
NOTE 15: EARNINGS PER SHARE
The following table sets forth the computation of the Company’s basic and diluted earnings per share:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | August 31, 2025 | August 25, 2024 | ||||||||||||||||||||
| (Dollars in millions, except per share amounts) | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
Net income from continuing operations | $ | $ | $ | $ | |||||||||||||||||||
Net income (loss) from discontinued operations, net of taxes | ( | ( | |||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted-average common shares outstanding - basic | |||||||||||||||||||||||
| Dilutive effect of stock awards | |||||||||||||||||||||||
| Weighted-average common shares outstanding - diluted | |||||||||||||||||||||||
Earnings (loss) per common share: | |||||||||||||||||||||||
Continuing operations - Basic | $ | $ | $ | $ | |||||||||||||||||||
Discontinued operations - Basic | ( | ( | |||||||||||||||||||||
Net income - Basic | $ | $ | $ | $ | |||||||||||||||||||
Continuing operations - Diluted | $ | $ | $ | $ | |||||||||||||||||||
Discontinued operations - Diluted | ( | ||||||||||||||||||||||
Net income - Diluted | $ | $ | $ | $ | |||||||||||||||||||
Anti-dilutive securities excluded from calculation of diluted earnings per share | |||||||||||||||||||||||
NOTE 16: RELATED PARTIES
Michelle Gass (President and Chief Executive Officer) and David Jedrzejek (Senior Vice President and General Counsel) are members of the Board of Directors of the Levi Strauss Foundation, which is an independent non-profit entity that is not one of our consolidated entities. Mr. Jedrzejek also serves as a Vice President of the Levi Strauss Foundation. During the three and nine months ended August 31, 2025, the Company donated $0.4 million and $5.3 million, respectively, to the Levi Strauss Foundation as compared to $0.4 million and $5.7 million, respectively, for the same prior-year periods. During the three and nine months ended August 31, 2025, the Company recognized expenses related to their donation commitments of $5.9 million and $9.1 million, respectively, as compared to $2.2 million and $6.4 million, respectively, for the same prior-year periods.
29
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
NOTE 17: BUSINESS SEGMENT INFORMATION
The Company manages its business according to three reportable segments: Americas, Europe, and Asia, collectively comprising the Company’s Levi’s Brands business, which includes Levi’s®, Levi Strauss Signature™ and Denizen® brands. The Beyond Yoga® business is managed separately. Corporate expenses are comprised of selling, general and administrative expenses that management does not attribute to any of our operating segments and these expenses primarily relate to corporate administration, information resources, finance and human resources functional and organizational costs. In the first quarter of 2024 we announced the strategic decision to discontinue the Denizen® brand with the wind down of operations substantially complete as of March 2, 2025. At the end of the first quarter of 2025, the Company determined that the Dockers® business met held for sale and discontinued operations accounting criteria. During the second quarter of 2025, the Company entered into a definitive agreement to sell its Dockers® business and on July 31, 2025 the Company sold the Dockers® intellectual property and operations in the U.S. and Canada. The sale of the remaining Dockers® operations is expected to close on or around January 31, 2026. Accordingly, the Company classified the Dockers® business as discontinued operations in its consolidated statements of income for all periods presented and excluded the business from segment results for all periods presented. See Note 2 “Discontinued Operations”.
The Company considers its chief executive officer to be its chief operating decision maker. The Company’s chief operating decision maker manages business operations, evaluates performance and allocates resources based on the segments’ net revenues and operating income.
30
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2025
Business segment information for the Company is as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | August 31, 2025 | August 25, 2024 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||
| Americas | $ | $ | $ | $ | |||||||||||||||||||
| Europe | |||||||||||||||||||||||
| Asia | |||||||||||||||||||||||
| Total segment net revenues | |||||||||||||||||||||||
Beyond Yoga® | |||||||||||||||||||||||
| Total net revenues | $ | $ | $ | $ | |||||||||||||||||||
Income (loss) from continuing operations before income taxes: | |||||||||||||||||||||||
| Americas | $ | $ | $ | $ | |||||||||||||||||||
| Europe | |||||||||||||||||||||||
| Asia | |||||||||||||||||||||||
| Total segment operating income | |||||||||||||||||||||||
Beyond Yoga® operating (loss) income | ( | ( | ( | ( | |||||||||||||||||||
Restructuring charges, net(1) | ( | ( | ( | ( | |||||||||||||||||||
Goodwill and other intangible asset impairment charges(2) | ( | ( | ( | ||||||||||||||||||||
Corporate expenses(3) | ( | ( | ( | ( | |||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Other income (expense), net(4) | ( | ( | |||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | $ | $ | $ | |||||||||||||||||||
(1)Restructuring charges, net for the three and nine months ended August 31, 2025 consisted primarily of severance and other post-employment benefit charges, and asset impairment and contract termination costs, partially offset by a gain recognized on the sale of a distribution center in connection with Project Fuel.
Restructuring charges, net for the three and nine months ended August 25, 2024 consisted primarily of severance and other post-employment benefit charges in connection with Project Fuel.
(2)For the three and nine months ended August 25, 2024, goodwill and other intangible asset impairment charges includes $36.3 66.0 million related to the Beyond Yoga® trademark and $9.1 million related to the Beyond Yoga® customer relationship intangible assets. Additionally, the nine months ended August 25, 2024.includes a $5.5 million goodwill impairment charge related to the footwear business.
(3)$3.1 million benefit related to incentive compensation for the Dockers® business was reclassified from Corporate expenses to SG&A within discontinued operations for the nine months ended August 25, 2024.
(4)Other income (expense), net for the three and nine months ended August 31, 2025 includes subrogation related to an insurance recovery of $1.1 2.7 1.4
31
Table of Contents
| Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | ||||
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited consolidated financial statements and related notes thereto included in Part I, Item 1 of this Quarterly Report and with our audited financial statements and related notes in our Annual Report on Form 10-K for the year ended December 1, 2024, filed with the Securities and Exchange Commission on January 29, 2025. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements” and “Risk Factors” for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements. We use a 52- or 53-week fiscal year, with each fiscal year ending on the Sunday that is closest to November 30 of that year. References to 2024 and 2025 below in this section are references to our fiscal years ending in December 2024 and November 2025, respectively, unless otherwise indicated. See “Financial Information Presentation - Fiscal Year.”
This Management’s Discussion and Analysis of Financial Condition and Results of Operations is designed to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results.
To supplement our consolidated financial statements prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we use certain non-GAAP financial measures throughout this Quarterly Report, as described further below, to provide investors with additional useful information about our financial performance, to enhance the overall understanding of our past performance and future prospects and to allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We are presenting these non-GAAP financial measures to assist investors in seeing our financial performance from management’s point of view and because we believe they provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.
However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, our consolidated financial statements prepared and presented in accordance with GAAP. For more information on our calculation of non-GAAP measures and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP, see “Non-GAAP Financial Measures.”
Overview
We are an iconic American company with a rich history of profitable growth, quality, innovation and corporate citizenship. Our story began in San Francisco, California, in 1853 as a wholesale dry goods business. We created the first riveted blue jean 20 years later. Today we design, market and sell products that include jeans, casual and dress pants, activewear, tops, shorts, skirts, dresses, jackets and related accessories for men, women and children around the world under our Levi’s®, Dockers®, Levi Strauss Signature™, Denizen® and Beyond Yoga® brands. We service our consumers through our global infrastructure which develops, sources and markets our products around the world. In the first quarter of 2024 we announced the strategic decision to discontinue the Denizen® brand. The wind down of Denizen® brand operations was substantially complete as of March 2, 2025. In the second quarter of 2025 we entered into a definitive agreement to sell our Dockers® business. On July 31, 2025 the Company sold the Dockers® intellectual property and operations in the U.S. and Canada. The sale of the remaining Dockers® operations is expected to close on or around January 31, 2026.
We recognize wholesale revenue from sales of our products through third-party retailers such as department stores, specialty retailers, third-party e-commerce sites and franchise locations dedicated to our brands. We also sell our products directly to consumers (“DTC”) through a variety of formats, including our own company-operated mainline and outlet stores, company-operated e-commerce sites and select shop-in-shops that we operate within department stores and other third-party retail locations. As of August 31, 2025, our products were sold in approximately 50,000 retail locations in approximately 120 countries, including approximately 3,200 brand-dedicated stores and shop-in-shops. As of August 31, 2025, we had 1,201 company-operated stores located in 39 countries and approximately 510 company-operated shop-in-shops. The remainder of our brand-dedicated stores and shop-in-shops were operated by franchisees and other partners.
32
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Across all of our brands, pants – including jeans, casual pants, dress pants, shorts, skirts and activewear – represented 67% and 65% of our total units sold in the first nine months of 2025 and 2024, respectively. Tops – including shirts, sweaters, jackets, dresses and jumpsuits – represented 29% of our total units sold in the first nine months of both 2025 and 2024. The remainder of our products are accessories. Men’s products generated 60% and 61% of our net revenues in the first nine months of 2025 and 2024, respectively. Women’s products generated 39% and 38% of our net revenues in the first nine months of 2025 and 2024, respectively. The remainder of our products are non-gendered. Products other than denim bottoms – which include tops, accessories and pants excluding jeans – represented 38% and 37% of our net revenues in the first nine months of 2025 and 2024, respectively.
Our Europe and Asia businesses, collectively, contributed 46% of our net revenues in the first nine months of both 2025 and 2024. Net revenues from our international business, which includes our Europe and Asia segments, as well as Canada and Latin America from our Americas segment, represented 58% of our net revenues in the first nine months of both 2025 and 2024. Sales of Levi’s® brand products represented approximately 94% of our net revenues in the first nine months of both 2025 and 2024.
Our wholesale channel generated 51% and 53% of our net revenues in the first nine months of 2025 and 2024, respectively. Sales to franchise partners, included as a component of our wholesale channel, generated 7% of our net revenues in the first nine months of both 2025 and 2024. Our DTC channel generated 49% and 47% of our net revenues in the first nine months of 2025 and 2024, respectively, with our company operated e-commerce business representing 22% and 21% of DTC channel net revenues in the first nine months of 2025 and 2024, respectively, and 11% and 10% of total net revenues in the first nine months of 2025 and 2024, respectively.
Sale of Dockers®
In the fourth quarter of 2024, the Company announced it had initiated a formal review of strategic alternatives for the Dockers® brand, which could include a potential sale or other strategic transaction. During the second quarter of 2025 the Company entered into a definitive agreement to sell its Dockers® business, subject to customary closing conditions. On July 31, 2025 the Company sold the Dockers® intellectual property and operations in the U.S. and Canada. The sale of the remaining Dockers® operations is expected to close on or around January 31, 2026. The Dockers® business was reported as discontinued operations in the consolidated statements of income for all periods presented. The current year and prior year metrics included in this Management’s Discussion and Analysis exclude the impact of Dockers®.
Project Fuel
In the first quarter of 2024, our Board of Directors (the "Board") approved a multi-year global productivity initiative, “Project Fuel”, designed to accelerate the execution of our Brand Led and DTC First strategies while fueling long-term profitable growth. This is a two-year initiative that began in 2024, with a focus on optimizing our operating model and structure, redesigning business processes and identifying opportunities to reduce costs and simplify processes across our organization. The Company is changing its distribution strategy from an owned and operated model to a mix of owned and third-party operated distribution centers, which has resulted and will continue to result in the sale, lease, exit or transfer of certain distribution centers currently owned and operated by the Company to third-party logistics providers. The first phase of the global productivity initiative was completed primarily in the first half of 2024. In connection with the initiative, we incurred restructuring charges of $22.1 million and restructuring related charges of $11.8 million in the first nine months of 2025, which were included in “Restructuring charges, net” and “Selling, general and administrative expenses” (“SG&A”), respectively, in the consolidated statements of income. We may incur additional significant restructuring and restructuring related charges as we progress our global productivity initiative, which could be material in a future fiscal quarter or year.
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Other Factors Affecting Our Business
We believe the other key business and marketplace factors that are impacting our business include the following:
•Additional tariffs recently imposed on products imported into the U.S. from most jurisdictions, along with retaliatory actions by other countries, have created an uncertain environment for global trade. In addition, many of our products are produced in countries, such as Bangladesh, Pakistan, Cambodia and Vietnam, which have been the subject of new U.S. reciprocal tariffs, and there may be additional or increased incremental tariff actions in the future. As a result of the new tariffs, expected additional tariffs, retaliatory actions taken by other countries in response, and continuing uncertainty as to the status of such tariffs, the cost of our inventory in the U.S. has increased and may increase further in the future. These increased costs could lead to a significant increase in cost of sales and a significant reduction in gross margin and income from operations. We are monitoring the changing tariff and trade restrictions, assessing the impact on our business and taking steps to mitigate their impact, which include supplier negotiations, cost reductions, changing the timing of receiving inventory and selective price increases. However, the duration, magnitude and scope of any additional tariffs, trade restrictions, retaliatory or other measures are difficult to predict, including related unfavorable impacts to consumer demand, along with the extent (if any) to which we will be able to offset the impacts of such actions through our mitigation efforts. These tariff actions, retaliatory measures, or other trade restrictions, could materially and adversely affect our business.
•As part of our effort to optimize our logistics network, we are in the process of transitioning the operation of certain of our global distribution and fulfillment centers to third-party logistics providers. This transition from owner-operated facilities to third-party logistics providers has and may continue to cause interruptions to these centers as we transition or restructure systems, technology and employees. We have and may continue to experience shipping delays, order cancellations and increased costs as a result of this transition. Given that, we are subject to concentration risks and any disruptions, delays or other events impacting the business of the third-party logistics providers may have a significant impact on our business, including our ability to timely fulfill orders. If we continue to encounter problems with our distribution system, our ability to meet customer and consumer expectations, manage inventory, complete sales and achieve operating efficiencies may be adversely affected.
•Macroeconomic pressures in the U.S. and the global economy such as changes in tariff regimes, inflation and recession fears are creating a complex and challenging retail environment for us and our customers as consumers may reduce discretionary spending. A decline in consumer spending has had and may continue to have an adverse effect on our revenues, margins and net income. These trends historically have impacted and may impact our future financial results, affecting revenue, margins and net income.
•As we continue to execute on our strategic framework to be DTC First, we expect to see greater impact on our margins, as the diversification of our business model across channels, geographies, brands, and categories affects our gross margin. For example, if our sales in higher gross margin channels, geographies, brands and categories grow at a faster rate than in our lower gross margin channels, geographies, brands and categories, we would expect a favorable impact to aggregate gross margin over time. Gross margin in our Europe segment is generally higher than in our Americas and Asia segments. DTC sales generally have higher gross margins than sales through third parties, although DTC sales also typically have higher selling expenses and could have lower profitability. Enhancements to our existing product offerings, or our expansion into new brands and products categories, may also impact our future gross margin.
•The current domestic and international political environment, including volatile trade relations and military and civil conflicts, have resulted in uncertainty surrounding the future state of the global economy. There is greater uncertainty with respect to potential changes in trade regulations, tariffs, sanctions and export controls which also increase volatility in the global economy. This environment has affected and may continue to affect production and distribution lead times, increasing our costs and potentially affecting our ability to meet customer demand. If these disruptions persist, they may require us to modify our current sourcing practices, which may impact our product costs, and, if not mitigated, could have a material adverse effect on our business and results of operations.
•Foreign currencies continue to be volatile, with the volatility increasing due to the imposition of and changing tariff regimes. Significant fluctuations of the U.S. Dollar against various foreign currencies, including the Euro and Mexican Peso, has in the past and may in the future negatively impact our financial results, revenue, operating margins and net income.
•Tax legislation continues to evolve globally with new laws and regulations that create uncertainty in the global economy. The Organization for Economic Cooperation and Development reached agreement among over 140 countries to implement a minimum 15% tax rate on certain multinational enterprises, commonly referred to as Pillar Two. Many countries continue to announce changes in their tax laws and regulations based on the Pillar Two
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framework. Additionally, U.S Congress enacted the One Big Beautiful Bill Act (“OBBBA”) which includes significant provisions, including tax cut extensions and modifications to the international tax framework. Although we expect the OBBBA to have immaterial impacts to our financial results, we will continue monitoring its impacts.
•There has been increased focus from our stakeholders, including consumers, employees, investors, regulatory organizations and legislatures on corporate environmental, social, and governance (“ESG”) practices, including corporate practices related to the causes and impacts of climate change and corporate statements, practices or products related to a variety of social issues. We expect that stakeholder expectations and actions with respect to ESG practices and social issues and regulatory requirements will continue to evolve rapidly, which may impact our reputation and financial results.
These factors contribute to a global market environment of intense competition, constant product innovation and continuing cost pressure, and combine with the continuing global economic conditions to create a challenging commercial and economic environment. We evaluate these factors as we develop and execute our strategies.
For additional information regarding these risks, as well as other risks we face, see the risk factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 1, 2024.
Seasonality of Sales
We typically achieve our largest quarterly revenues in the fourth quarter. In fiscal year 2024, our net revenues in the first, second, third and fourth quarters represented 24%, 23%, 24% and 29%, respectively, of our total net revenues for the year.
Our Third Quarter 2025 Results
•Net revenues. Consolidated net revenues increased 7.0% on a reported basis and 6.9% on an organic net revenues basis compared to the third quarter of 2024 reflecting net revenue growth across all regions and in both DTC and wholesale channels. Organic net revenues excludes the impact on net revenues of the footwear and Denizen® divestitures from the third quarter of 2024.
•Net income from continuing operations. We recognized consolidated net income from continuing operations of $122.0 million, compared to $22.7 million in the third quarter of 2024. The increase was primarily driven by Beyond Yoga® goodwill and intangible impairment charges recorded in the third quarter of 2024 as well as higher gross profit. These increases were partially offset by higher income taxes in the current year. Operating margin was 10.8%, up from 2.3% in the third quarter of 2024.
•Adjusted EBIT. Compared to the third quarter of 2024, Adjusted EBIT increased 2.5% to $182.3 million from $177.8 million. The increase is due to higher gross profit partially offset by higher Adjusted SG&A. As a result, Adjusted EBIT margin was 11.8%, 50 basis points lower than the third quarter of 2024 on a reported basis, and 70 basis points lower on a constant-currency basis.
•Adjusted net income. Compared to the third quarter of 2024, Adjusted net income increased to $135.7 million from $133.9 million. The increase was due to higher Adjusted EBIT as described above, partially offset by higher income taxes in the current year.
•Diluted earnings per share from continuing operations. We recognized diluted earnings per share from continuing operations of $0.31, compared to $0.06 in the third quarter of 2024, mainly due to the higher Net income from continuing operations described above.
•Adjusted diluted earnings per share. Compared to the third quarter of 2024, Adjusted diluted earnings per share increased to $0.34 from $0.33, mainly due to the higher Adjusted net income described above. Currency translation favorably affected Adjusted diluted earnings per share by $0.01.
•Inventory. Compared to the third quarter of 2024, inventory increased 12%, excluding the Dockers® business, in preparation for sales for the remainder of the year and from earlier receipts in order to mitigate potential impacts from tariffs.
Our Year-to-Date 2025 Results
•Net revenues. Consolidated net revenues increased 5.5% on a reported basis and 8.0% on an organic net revenues basis compared to the first nine months of 2024. Net revenues grew across our regions and in both our DTC and wholesale channels. Organic net revenues excludes the impact on net revenues of the footwear and Denizen® divestitures.
•Net income from continuing operations. Compared to the first nine months of 2024, consolidated net income from continuing operations increased to $341.8 million from $30.0 million, primarily due to the recognition of $22.1 million
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in restructuring charges in the current year compared to $171.6 million recognized in the prior year, and Beyond Yoga® goodwill and intangible impairment charges recorded in the third quarter of 2024. These increases were partially offset by higher income taxes in the current year. Operating margin was 10.3% compared to 1.3% in the first nine months of 2024.
•Adjusted EBIT. Compared to the first nine months of 2024, Adjusted EBIT increased 25.6% to $505.6 million from $402.4 million, primarily due to higher gross profit in the current year. Adjusted EBIT margin was 11.2%, 180 basis points higher than the first nine months of 2024 on a reported basis and 190 basis points higher on a constant-currency basis.
•Adjusted net income. Compared to the first nine months of 2024, Adjusted net income increased 24.9% to $374.2 million from $299.5 million, primarily due to higher Adjusted EBIT described above, partially offset by higher income taxes in the current year.
•Diluted earnings per share from continuing operations. Compared to the first nine months of 2024, diluted earnings per share increased to $0.86 from $0.07, mainly due to higher net income from continuing operations described above.
•Adjusted diluted earnings per share. Compared to the first nine months of 2024, Adjusted diluted earnings per share increased to $0.94 from $0.75, due to higher Adjusted net income described above. Currency translation unfavorably affected Adjusted diluted earnings per share by $0.01.
For more information on Organic net revenues, Adjusted SG&A, Adjusted EBIT, Adjusted net income and Adjusted diluted earnings per share, measures not prepared in accordance with GAAP, and reconciliations of such measures to net income from continuing operations and diluted earnings per share from continuing operations, see “Non-GAAP Financial Measures.”
Financial Information Presentation
Fiscal year. We use a 52- or 53- week fiscal year, with each fiscal year ending on the Sunday that is closest to November 30 of that year. Certain of our foreign subsidiaries have fiscal years ending November 30. Each fiscal year generally consists of four 13-week quarters, with each quarter ending on the Sunday that is closest to the last day of the last month of that quarter. Fiscal year 2025 is a 52-week year, ending on November 30, 2025 and fiscal year 2024 was a 53-week year, ending on December 1, 2024. Each quarter of fiscal years 2025 and 2024 consists of 13 weeks, with the exception of the fourth quarter of 2024, which consisted of 14 weeks.
Segments. Our Levi’s Brands business, which includes Levi’s®, Levi Strauss Signature™ and Denizen® brands, is defined by geographical regions into three segments: Americas, Europe and Asia. Our Beyond Yoga® business is managed separately.
Classification. Our classification of certain significant revenues and expenses reflects the following:
•Net revenues comprise net sales and licensing revenues. Net sales include sales of products to wholesale customers, including franchised stores, and direct sales to consumers at our company-operated stores and shop-in-shops located within department stores and other third-party locations, as well as company-operated e-commerce sites. Net revenues are recorded net of discounts, allowances for estimated returns and retailer promotions and other incentives. Licensing revenues, which include revenues from the use of our trademarks in connection with the manufacturing, advertising and distribution of trademarked products by third-party licensees, are earned and recognized as products are sold by licensees based on royalty rates as set forth in the applicable licensing agreements.
•Cost of goods sold primarily comprises product costs, labor and related overhead, sourcing costs, inbound freight, internal transfers and the cost of operating our manufacturing facilities, including the related depreciation expense. On both a reported and constant-currency basis, cost of goods sold reflects the transactional currency impact resulting from the purchase of products in a currency other than the functional currency.
•Selling expenses reflected in SG&A include, among other things, all occupancy costs and depreciation associated with our company-operated stores and commissions associated with our company-operated shop-in-shops, as well as costs associated with our e-commerce operations.
•We reflect substantially all distribution costs in SG&A, for both our DTC and wholesale channels, including costs related to receiving and inspection at distribution centers, warehousing, shipping to our customers, handling, and certain other activities associated with our distribution network.
Discontinued operations. At the end of the first quarter of 2025 the Dockers® business was held for sale and reported as discontinued operations in the consolidated statements of income for all periods presented.
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Results of Operations
The following table summarizes, for the periods indicated, our consolidated statements of income, the changes in these items from period to period and these items expressed as a percentage of net revenues:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | % Increase (Decrease) | August 31, 2025 % of Net Revenues | August 25, 2024 % of Net Revenues | August 31, 2025 | August 25, 2024 | % Increase (Decrease) | August 31, 2025 % of Net Revenues | August 25, 2024 % of Net Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars and shares in millions, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net revenues | $ | 1,543.4 | $ | 1,443.1 | 7.0 | % | 100.0 | % | 100.0 | % | $ | 4,516.2 | $ | 4,282.1 | 5.5 | % | 100.0 | % | 100.0 | % | |||||||||||||||||||||||||||||||||||||||
| Cost of goods sold | 591.8 | 569.2 | 4.0 | % | 38.3 | % | 39.4 | % | 1,711.2 | 1,706.0 | 0.3 | % | 37.9 | % | 39.8 | % | |||||||||||||||||||||||||||||||||||||||||||
| Gross profit | 951.6 | 873.9 | 8.9 | % | 61.7 | % | 60.6 | % | 2,805.0 | 2,576.1 | 8.9 | % | 62.1 | % | 60.2 | % | |||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 775.6 | 726.4 | 6.8 | % | 50.3 | % | 50.3 | % | 2,313.4 | 2,233.4 | 3.6 | % | 51.2 | % | 52.2 | % | |||||||||||||||||||||||||||||||||||||||||||
| Restructuring charges, net | 8.6 | 3.4 | 152.9 | % | 0.6 | % | 0.2 | % | 22.1 | 171.6 | (87.1) | % | 0.5 | % | 4.0 | % | |||||||||||||||||||||||||||||||||||||||||||
| Goodwill and other intangible asset impairment charges | — | 111.4 | (100.0) | % | — | % | 7.7 | % | 2.5 | 116.9 | (97.9) | % | 0.1 | % | 2.7 | % | |||||||||||||||||||||||||||||||||||||||||||
Operating income | 167.4 | 32.7 | * | 10.8 | % | 2.3 | % | 467.0 | 54.2 | * | 10.3 | % | 1.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | (12.5) | (10.1) | 23.8 | % | (0.8) | % | (0.7) | % | (35.2) | (30.4) | 15.8 | % | (0.8) | % | (0.7) | % | |||||||||||||||||||||||||||||||||||||||||||
Other income (expense), net | 1.3 | (0.4) | * | 0.1 | % | — | % | 3.5 | (2.3) | * | 0.1 | % | (0.1) | % | |||||||||||||||||||||||||||||||||||||||||||||
Income from continuing operations before income taxes | 156.2 | 22.2 | * | 10.1 | % | 1.5 | % | 435.3 | 21.5 | * | 9.6 | % | 0.5 | % | |||||||||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) | 34.2 | (0.5) | * | 2.2 | % | — | % | 93.5 | (8.5) | * | 2.1 | % | (0.2) | % | |||||||||||||||||||||||||||||||||||||||||||||
Net income from continuing operations | 122.0 | 22.7 | * | 7.9 | % | 1.6 | % | $ | 341.8 | $ | 30.0 | * | 7.6 | % | 0.7 | % | |||||||||||||||||||||||||||||||||||||||||||
Net income (loss) from discontinued operations, net of taxes | 96.1 | (2.0) | * | 6.2 | % | (0.1) | % | 78.3 | (2.0) | * | 1.7 | % | — | % | |||||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 218.1 | $ | 20.7 | * | 14.1 | % | 1.4 | % | $ | 420.1 | $ | 28.0 | * | 9.3 | % | 0.7 | % | |||||||||||||||||||||||||||||||||||||||||
Earnings (loss) per common share: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Continuing operations - Basic | $ | 0.31 | $ | 0.06 | * | * | * | $ | 0.87 | $ | 0.08 | * | * | * | |||||||||||||||||||||||||||||||||||||||||||||
Discontinued operations - Basic | 0.24 | (0.01) | * | * | * | 0.19 | (0.01) | * | * | * | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income - Basic | $ | 0.55 | $ | 0.05 | * | * | * | $ | 1.06 | $ | 0.07 | * | * | * | |||||||||||||||||||||||||||||||||||||||||||||
Continuing operations - Diluted | $ | 0.31 | $ | 0.06 | * | * | * | $ | 0.86 | $ | 0.07 | * | * | * | |||||||||||||||||||||||||||||||||||||||||||||
Discontinued operations - Diluted | 0.24 | (0.01) | * | * | * | 0.19 | — | * | * | * | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income - Diluted | $ | 0.55 | $ | 0.05 | * | * | * | $ | 1.05 | $ | 0.07 | * | * | * | |||||||||||||||||||||||||||||||||||||||||||||
Weighted-average common shares outstanding (in millions): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic | 395.7 | 398.2 | (0.6) | % | * | * | 396.6 | 398.6 | (0.5) | % | * | * | |||||||||||||||||||||||||||||||||||||||||||||||
| Diluted | 399.5 | 402.4 | (0.7) | % | * | * | 400.4 | 402.8 | (0.6) | % | * | * | |||||||||||||||||||||||||||||||||||||||||||||||
_____________
* Not meaningful
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Net revenues
The following table presents net revenues for the periods indicated and the changes in net revenues on both reported and organic net revenues basis from period to period.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
| % Increase (Decrease) | % Increase (Decrease) | ||||||||||||||||||||||||||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | As Reported | Organic Net Revenues | August 31, 2025 | August 25, 2024 | As Reported | Organic Net Revenues | ||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
| Levi’s Brands: | |||||||||||||||||||||||||||||||||||||||||||||||
| Americas | $ | 806.4 | $ | 757.2 | 6.5 | % | 7.3 | % | $ | 2,337.8 | $ | 2,205.2 | 6.0 | % | 9.0 | % | |||||||||||||||||||||||||||||||
| Europe | 426.3 | 406.6 | 4.8 | % | 3.1 | % | 1,229.9 | 1,183.8 | 3.9 | % | 6.6 | % | |||||||||||||||||||||||||||||||||||
| Asia | 277.7 | 247.1 | 12.4 | % | 12.3 | % | 843.5 | 795.9 | 6.0 | % | 7.5 | % | |||||||||||||||||||||||||||||||||||
| Total Levi’s Brands net revenues | 1,510.4 | 1,410.9 | 7.1 | % | 7.0 | % | 4,411.2 | 4,184.9 | 5.4 | % | 8.0 | % | |||||||||||||||||||||||||||||||||||
Beyond Yoga® | 33.0 | 32.2 | 2.5 | % | 2.5 | % | 105.0 | 97.2 | 8.0 | % | 8.0 | % | |||||||||||||||||||||||||||||||||||
| Total net revenues | $ | 1,543.4 | $ | 1,443.1 | 7.0 | % | 6.9 | % | $ | 4,516.2 | $ | 4,282.1 | 5.5 | % | 8.0 | % | |||||||||||||||||||||||||||||||
| Net revenues by channel: | |||||||||||||||||||||||||||||||||||||||||||||||
| Wholesale | $ | 832.2 | $ | 804.1 | 3.5 | % | 5.3 | % | $ | 2,301.4 | $ | 2,273.3 | 1.2 | % | 5.7 | % | |||||||||||||||||||||||||||||||
| DTC | 711.2 | 639.0 | 11.3 | % | 8.8 | % | 2,214.8 | 2,008.8 | 10.3 | % | 10.6 | % | |||||||||||||||||||||||||||||||||||
| Total net revenues | $ | 1,543.4 | $ | 1,443.1 | 7.0 | % | 6.9 | % | $ | 4,516.2 | $ | 4,282.1 | 5.5 | % | 8.0 | % | |||||||||||||||||||||||||||||||
Levi’s Brands net revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Levi’s® | $ | 1,450.8 | $ | 1,358.5 | 6.8 | % | 6.4 | % | $ | 4,236.4 | $ | 4,004.3 | 5.8 | % | 7.9 | % | |||||||||||||||||||||||||||||||
Levi Strauss SignatureTM | 59.6 | 49.2 | 21.1 | % | 21.1 | % | 172.5 | 152.9 | 12.8 | % | 13.0 | % | |||||||||||||||||||||||||||||||||||
Denizen® | — | 3.2 | (100.0) | % | * | 2.3 | 27.7 | (91.7) | % | * | |||||||||||||||||||||||||||||||||||||
Total Levi’s Brands net revenues | $ | 1,510.4 | $ | 1,410.9 | 7.1 | % | 7.0 | % | $ | 4,411.2 | $ | 4,184.9 | 5.4 | % | 8.0 | % | |||||||||||||||||||||||||||||||
* Not meaningful
Total net revenues increased on both a reported and organic net revenues basis for the three-month and nine-month periods ended August 31, 2025, as compared to the same periods in 2024. Currency translation had a favorable impact on total net revenues of approximately $27 million for the three-month period ended August 31, 2025 and an unfavorable impact of approximately $27 million for the nine-month period ended August 31, 2025. The divestitures of the Denizen® business and footwear category impacted net revenues unfavorably by $3 million and $22 million, respectively, for the three-month period ended August 31, 2025 and by $25 million and $50 million, respectively, for the nine-month period ended August 31, 2025.
Americas. Currency translation had an unfavorable impact on net revenues of approximately $2 million and approximately $36 million for the three-month and nine-month periods ended August 31, 2025, respectively. Net revenues in the Americas increased for the three-month and nine-month periods ended August 31, 2025 on both reported and organic net revenues basis compared to the prior-year periods driven by growth in both DTC and wholesale channels.
The increase in DTC revenues was attributable to growth across all markets, led by the U.S. and Latin America, driven by store performance due to higher traffic, and also benefited from higher average revenues per unit. E-commerce revenues increased, primarily due to higher online traffic. Wholesale revenues increased primarily due to higher volume in the U.S. and Latin America, including from door and category expansion. This was partially offset by a decrease related to lower shipping in connection with the transition to the distribution center in Groveport, Ohio for the three-month period ended August 31, 2025. Additionally, Colombia stores, distribution and logistics operations acquired at the start of the second quarter of 2024, contributed $17 million to net revenue growth for the nine-month period ended August 31, 2025.
Europe. Currency translation had a favorable impact on net revenues of approximately $29 million and approximately $20 million for the three-month and nine-month periods ended August 31, 2025, respectively. Net revenues in Europe increased for the three-month and nine-month periods ended August 31, 2025 on both a reported and organic net revenues basis compared to the prior-year periods, reflecting growth in our DTC channel as well as growth in our wholesale channel on an organic basis.
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The increase in DTC revenues was primarily due to store performance. E-commerce revenues increased primarily due to higher traffic. Wholesale revenues increased for the three-month and nine-month periods ended August 31, 2025 on an organic net revenue basis compared to the prior year period primarily due to higher volumes, and decreased on a reported basis due to the divestiture of the footwear category.
Asia. Currency translation did not have a significant impact on net revenues for the three-month period ended August 31, 2025, and had an unfavorable impact of approximately $11 million for the nine-month period ended August 31, 2025. Net revenues in Asia increased for the three-month and nine-month periods ended August 31, 2025 on both reported and organic net revenues basis.
Organic net revenues increased in our DTC and wholesale channels for the three-month and nine-month periods ended August 31, 2025, particularly in India, Japan and Turkey. The increase in DTC revenues was primarily due to store expansion and strong performance in our company-operated stores as a result of increased volume driven by higher traffic. We benefited from 46 more company-operated stores in operation in Asia as of August 31, 2025 as compared to August 25, 2024. The increase in wholesale revenue was primarily due to an increase in units sold. DTC and wholesale revenues benefited from price increases in Turkey and India.
Beyond Yoga®. Net revenues in Beyond Yoga® increased on a reported and organic net revenues basis for the three-month and nine-month periods ended August 31, 2025 compared to the prior year periods, primarily due to growth in e-commerce net revenues reflecting higher demand, partially offset by a decrease in wholesale net revenues. Currency translation did not have an impact on net revenues.
Net revenues by channel
Wholesale. Currency translation had a favorable impact on net revenues of approximately $12 million for the three-month period ended August 31, 2025 and an unfavorable impact of approximately $21 million for the nine-month period ended August 31, 2025. Net revenues in our wholesale channel increased for the three-month and nine-month periods ended August 31, 2025 compared with the prior-year periods on a reported and organic net revenues basis primarily due to higher volumes. For the nine-month period ended August 31, 2025, wholesale revenues on a reported basis increased in the Americas, partially offset by a decline in Europe due to the divestiture of the footwear category.
DTC (Direct to Consumer). Currency translation had a favorable impact on net revenues of approximately $15 million for the three-month period ended August 31, 2025 and an unfavorable impact of approximately $6 million for the nine-month period ended August 31, 2025. Net revenues in our DTC channel increased on both a reported and organic net revenues basis for the three-month and nine-month periods ended August 31, 2025. The increase was driven by store performance, as well as e-commerce, which was driven primarily by higher traffic. On an organic net revenues basis our DTC business grew 7% and 8% in the U.S., 4% and 8% in Europe, and 14% and 13% in Asia for the three-month and nine-month periods ended August 31, 2025, respectively. For the three-month and nine-month periods ended August 31, 2025 net revenues from e-commerce on a reported basis grew 18% and 14%, respectively. As a percentage of net revenues on a reported basis for the three-month and nine-month periods ended August 31, 2025, DTC comprised 46% and 49% of total net revenues, respectively.
Levi’s Brands net revenues
Levi’s®. Currency translation had a favorable impact on net revenues of approximately $27 million for the three-month period ended August 31, 2025 and an unfavorable impact of approximately $26 million for the nine-month period ended August 31, 2025. Net revenues for the Levi’s® brand increased on both a reported and organic net revenues basis for the three-month and nine-month periods ended August 31, 2025. The increase was a result of higher revenue in our DTC channel, primarily due to improved store performance and higher e-commerce traffic, and an increase in wholesale revenues, primarily in the Americas, due to higher volume.
Levi Strauss Signature™. Currency translation did not have a significant impact on net revenues for the three-month and nine-month periods ended August 31, 2025. Net revenues for the Levi Strauss Signature™ brand increased on both a reported and organic net revenues basis for the three-month and nine-month periods ended August 31, 2025 due to more units sold.
Denizen®. Currency translation did not have a significant impact on net revenues for the three-month and nine-month periods ended August 31, 2025. Net revenues decreased on a reported basis due to the exit of the brand which was largely complete by March 2, 2025.
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Gross profit
The following table shows consolidated gross profit and gross margin for the periods indicated and the changes in these items from period to period:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | % Increase (Decrease) | August 31, 2025 | August 25, 2024 | % Increase (Decrease) | ||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||
| Net revenues | $ | 1,543.4 | $ | 1,443.1 | 7.0 | % | $ | 4,516.2 | $ | 4,282.1 | 5.5 | % | |||||||||||||||||||||||
| Cost of goods sold | 591.8 | 569.2 | 4.0 | % | 1,711.2 | 1,706.0 | 0.3 | % | |||||||||||||||||||||||||||
| Gross profit | $ | 951.6 | $ | 873.9 | 8.9 | % | $ | 2,805.0 | $ | 2,576.1 | 8.9 | % | |||||||||||||||||||||||
| Gross margin | 61.7 | % | 60.6 | % | 62.1 | % | 60.2 | % | |||||||||||||||||||||||||||
Currency translation had a favorable impact on gross profit of approximately $18 million for the three-month period ended August 31, 2025 and an unfavorable impact of approximately $10 million for the nine-month period ended August 31, 2025. For the three-month period ended August 31, 2025, the increase in gross margin was primarily driven by favorable channel mix and price increases, partially offset by the impact of tariffs. For the nine-month period ended August 31, 2025, the increase in gross margin was primarily driven by favorable channel mix and lower product costs. Additionally, gross margin increased approximately 50 basis points and 40 basis points as a result of currency exchange, including transaction impacts, for the three-month and nine-month periods ended August 31, 2025, respectively,
Selling, general and administrative expenses
The following table shows SG&A for the periods indicated, the changes in these items from period to period and these items expressed as a percentage of net revenues:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | % Increase (Decrease) | August 31, 2025 | August 25, 2024 | August 31, 2025 | August 25, 2024 | % Increase (Decrease) | August 31, 2025 | August 25, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| % of Net Revenues | % of Net Revenues | % of Net Revenues | % of Net Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Selling | $ | 336.3 | $ | 319.6 | 5.2 | % | 21.8 | % | 22.1 | % | $ | 992.9 | $ | 968.6 | 2.5 | % | 22.0 | % | 22.6 | % | |||||||||||||||||||||||||||||||||||||||
| Advertising and promotion | 98.5 | 89.4 | 10.2 | % | 6.4 | % | 6.2 | % | 306.4 | 297.1 | 3.1 | % | 6.8 | % | 6.9 | % | |||||||||||||||||||||||||||||||||||||||||||
Distribution | 108.5 | 90.8 | 19.5 | % | 7.0 | % | 6.3 | % | 331.2 | 271.1 | 22.2 | % | 7.3 | % | 6.3 | % | |||||||||||||||||||||||||||||||||||||||||||
| Other | 232.3 | 226.6 | 2.5 | % | 15.1 | % | 15.7 | % | 682.9 | 696.6 | (2.0) | % | 15.1 | % | 16.3 | % | |||||||||||||||||||||||||||||||||||||||||||
| Total SG&A | $ | 775.6 | $ | 726.4 | 6.8 | % | 50.3 | % | 50.3 | % | $ | 2,313.4 | $ | 2,233.4 | 3.6 | % | 51.2 | % | 52.2 | % | |||||||||||||||||||||||||||||||||||||||
______________
* Not meaningful
Currency translation had an unfavorable impact on SG&A of approximately $12 million and a favorable impact of approximately $5 million for the three-month and nine-month periods ended August 31, 2025, respectively.
Selling. Currency translation had an unfavorable impact on selling expenses of approximately $7 million and a favorable impact of approximately $3 million for the three-month and nine-month periods ended August 31, 2025, respectively. Excluding the effects of currency, selling expenses increased for the three-month and nine-month periods ended August 31, 2025 primarily due to DTC business expansion in the current year as compared to the prior-year periods, partially offset by e-commerce related fulfillment costs that are now included as distribution expenses.
Advertising and promotion. Currency translation did not have a significant impact on advertising and promotion expenses for the three-month and nine-month periods ended August 31, 2025. The increase in advertising and promotion expenses was due to increased media spending which included expenses associated with the REIIMAGINE campaign.
Distribution. Currency translation had an unfavorable impact on distribution expenses of approximately $2 million for the three-month period ended August 31, 2025 and did not have a significant impact for the nine-month period ended August
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31, 2025. The increase in distribution expenses was primarily due to higher spend in support of both our DTC and wholesale businesses, including costs to transition to third-party distribution centers in Groveport, Ohio and Dorsten, Germany and costs to run parallel distribution centers in the U.S. as we continue to implement our distribution strategy model to operate a mix of owned and third-party operated distribution centers. This is partially offset by lower costs from Company owned and operated distribution centers that we are winding down and exiting. Distribution expenses for the three-month and nine-month periods ended August 31, 2025 included e-commerce related fulfillment costs of approximately $8.0 million and $27.0 million.
Other. Other expenses include functional administrative and organization costs, information resources, and marketing organization costs. Currency translation did not have a significant impact on other expenses for the three-month period ended August 31, 2025, and had a favorable impact of approximately $2 million for the nine-month period ended August 31, 2025. The increase in other expenses for the three-month period ended August 31, 2025 was primarily due to increases in incentive compensation, professional fees and technology costs partially offset by lower restructuring-related charges and an $11.1 million impairment charge related to discontinued technology projects in the prior year. During the three-month periods ended August 31, 2025 and August 25, 2024 the company recorded restructuring related charges of $4.3 million and $19.0 million, respectively.
The decrease in other expenses for the nine-month period ended August 31, 2025 was primarily due to decreases in restructuring related charges and an $11.1 million impairment charge related to discontinued technology projects in the prior year. This was partially offset by increases in incentive compensation, professional fees and technology costs. During the nine-month periods ended August 31, 2025 and August 25, 2024, the Company recognized restructuring related charges of $11.8 million and $34.3 million, respectively.
Restructuring charges, net
During the three-month and nine-month periods ended August 31, 2025, we recognized restructuring charges of $8.6 million and $22.1 million, respectively, in connection with Project Fuel consisting primarily of severance and other post-employment benefit charges, asset impairments and contract terminations in connection with closures of distribution centers which were largely offset by a gain on sale of a previously closed distribution center. During the three-month and nine-month periods ended August 25, 2024, we recognized restructuring charges, net of $3.4 million and $171.6 million, respectively, in connection with Project Fuel consisting primarily of severance and other post-employment benefit charges.
Goodwill and other intangible asset impairment charges
During the third quarter of 2025, as part of the Company’s annual review of the Beyond Yoga® reporting unit, the Company elected to perform a single step quantitative impairment test on the goodwill and indefinite lived trademark intangible assigned to the Beyond Yoga® reporting unit. Although the fair values of the Beyond Yoga® reporting unit and the indefinite lived trademark intangible exceeded their carrying values, the fair values of the Beyond Yoga® reporting unit and the indefinite lived trademark intangible were less than 10% over their carrying values.
For the three-month and nine-month periods ended August 25, 2024, we recognized impairment charges of $111.4 million related to the Beyond Yoga® acquisition. The impairment charge is composed of a $36.3 million impairment in goodwill, a $66.0 million impairment in the trademark intangible asset and a $9.1 million impairment in the customer relationship intangible assets. During 2024, the Company appointed new Beyond Yoga® executive management and implemented a new strategic plan for growth and expansion. Additionally, during the first quarter of 2024 we recognized $5.5 million in goodwill impairment charges related to our footwear business as a result of the decision to discontinue the category.
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Operating income
The following table shows operating income, restructuring charges and corporate expenses for the periods indicated, the changes in these items from period to period and these items expressed as a percentage of net revenues:
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | % Increase (Decrease) | August 31, 2025 | August 25, 2024 | August 31, 2025 | August 25, 2024 | % Increase (Decrease) | August 31, 2025 | August 25, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| % of Net Revenues | % of Net Revenues | % of Net Revenues | % of Net Revenues | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Levi’s Brands: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Americas | $ | 189.3 | $ | 173.9 | 8.8 | % | 23.5 | % | 23.0 | % | $ | 512.3 | $ | 432.8 | 18.4 | % | 21.9 | % | 19.6 | % | ||||||||||||||||||||||||||||||||||||||||||
| Europe | 91.0 | 83.2 | 9.4 | % | 21.3 | % | 20.5 | % | 262.8 | 239.9 | 9.5 | % | 21.4 | % | 20.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Asia | 33.4 | 28.5 | 17.2 | % | 12.0 | % | 11.5 | % | 120.9 | 111.0 | 8.9 | % | 14.3 | % | 13.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Total Levi’s Brands operating income | 313.7 | 285.6 | 9.8 | % | 20.8 | % | 20.2 | % | 896.0 | 783.7 | 14.3 | % | 20.3 | % | 18.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Beyond Yoga® operating income (loss) | (4.8) | (5.8) | (16.6) | % | (14.6) | % | (17.9) | % | (12.3) | (9.6) | 28.1 | % | (11.7) | % | (9.9) | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring charges, net | (8.6) | (3.4) | (152.2) | % | (0.6) | % | v | (0.2) | % | v | (22.1) | (171.6) | (87.1) | % | (0.5) | % | v | (4.0) | % | v | ||||||||||||||||||||||||||||||||||||||||||
| Goodwill and other intangible asset impairment charges | — | (111.4) | 100.0 | % | — | % | v | (7.7) | % | v | (2.5) | (116.9) | (97.9) | % | (0.1) | % | v | (2.7) | % | v | ||||||||||||||||||||||||||||||||||||||||||
| Corporate expenses | (132.9) | (132.3) | (0.5) | % | (8.6) | % | v | (9.2) | % | v | (392.1) | (431.4) | 9.1 | % | (8.7) | % | v | (10.1) | % | v | ||||||||||||||||||||||||||||||||||||||||||
Total operating income | $ | 167.4 | $ | 32.7 | * | 10.8 | % | v | 2.3 | % | v | $ | 467.0 | $ | 54.2 | * | 10.3 | % | v | 1.3 | % | v | ||||||||||||||||||||||||||||||||||||||||
| Operating margin | 10.8 | % | 2.3 | % | 10.3 | % | 1.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
______________
v Percentage of consolidated net revenues
* Not meaningful
Currency translation had a favorable impact on total operating income of approximately $6 million for the three-month period ended August 31, 2025 and an unfavorable impact of approximately $9 million for the nine-month period ended August 31, 2025.
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Levi’s Brands operating income.
•Americas. Currency translation did not have a significant impact on operating income for the three-month period ended August 31, 2025, and had an unfavorable impact of approximately $6 million for the nine-month period ended August 31, 2025. The increases in operating income for the three-month and nine-month periods ended August 31, 2025 were due to higher revenues and higher gross margins partially offset by higher SG&A compared to the prior-year periods.
•Europe. Currency translation had a favorable impact on operating income of approximately $7 million and approximately $3 million for the three-month and nine-month periods ended August 31, 2025, respectively. Excluding the effects of currency, operating income increased for the three-month period ended August 31, 2025 compared with the prior-year period primarily due to higher gross margins partially offset by lower revenues and higher SG&A. Operating income increased during the nine-month period ended August 31, 2025 compared with the prior-year period primarily due to higher revenues and gross margins, partially offset by higher SG&A.
•Asia. Currency translation did not have a significant impact on operating income for the three-month period ended August 31, 2025, and had an unfavorable impact of approximately $3 million for the nine-month period ended August 31, 2025. Excluding the effects of currency, operating income increased for the three-month period ended August 31, 2025 due to an increase in revenues, partially offset by a decrease in gross margins and higher SG&A. Operating income increased for the nine-month period ended August 31, 2025 compared to the prior year period primarily due to higher revenues partially offset by higher SG&A.
Beyond Yoga® operating loss. Currency translation did not have an impact for the three-month and nine-month periods ended August 31, 2025. The decrease in operating losses for the three-month period ended August 31, 2025 as compared to the prior year period was due to higher gross margins, partially offset by higher SG&A. The increase in operating losses for the nine-month period ended August 31, 2025 as compared to the prior-year period was primarily due to higher SG&A, partially offset by higher revenue and gross margins.
Restructuring charges, net. Currency translation did not have a significant impact on restructuring charges, net for the three-month period ended August 31, 2025, and had an unfavorable impact of approximately $4 million for the nine-month period ended August 31, 2025. During the three-month and nine-month periods ended August 31, 2025, we recognized restructuring charges of $8.6 million and $22.1 million, respectively, in connection with Project Fuel consisting primarily of severance and other post-employment benefit charges, asset impairments and contract terminations in connection with closures of distribution centers which were largely offset by gain on sale of a previously closed distribution center. During the three-month and nine-month periods ended August 25, 2024, we recognized restructuring charges of $3.4 million and $171.6 million, respectively, in connection with Project Fuel consisting primarily of severance and post-employment benefit charges.
Goodwill and other intangible asset impairment charges. For the three-month and nine-month periods ended August 25, 2024, we recognized impairment charges of $111.4 million related to the Beyond Yoga® acquisition. The impairment charge is composed of a $36.3 million impairment in goodwill, a $66.0 million impairment in the trademark intangible asset and a $9.1 million impairment in the customer relationship intangible assets. During 2024, the Company appointed new Beyond Yoga® executive management and implemented a new strategic plan for growth and expansion. Additionally, during the first quarter of 2024 we recognized $5.5 million in goodwill impairment charges related to our footwear business as a result of the decision to discontinue the category.
Corporate. Corporate expenses represent costs that management does not attribute to any of our operating segments. Included in corporate expenses are other corporate staff costs and costs associated with our global inventory sourcing organization, which are reported as a component of consolidated gross margin. Currency translation did not have a significant impact on corporate expenses for the three-month and nine-month periods ended August 31, 2025.
Corporate expenses were flat for the three-month period ended August 31, 2025 compared with the prior year period as increases in incentive compensation, professional fees and technology costs were largely offset by lower restructuring-related charges and an $11.1 million impairment charge related to discontinued technology projects in the prior year. During the three-month periods ended August 31, 2025 and August 25, 2024 the company recorded restructuring related charges of $4.3 million and $19.0 million, respectively.
Corporate expenses decreased for the nine-month period ended August 31, 2025 primarily due to decreases in restructuring related charges and technology impairments related to our restructuring initiative and lower global sourcing costs. These decreases were partially offset by increases in incentive compensation, professional fees and technology costs.
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Interest expense
Interest expense was $12.5 million and $35.2 million for the three-month and nine-month periods ended August 31, 2025, respectively, as compared to $10.1 million and $30.4 million in the prior-year periods.
Our weighted-average interest rate on average borrowings outstanding during the three-month and nine-month periods ended August 31, 2025 was 4.43% and 4.32%, respectively, as compared to 3.97% and 3.98% during the comparable periods in 2024.
Other income (expense), net
For the three-month and nine-month periods ended August 31, 2025, we recorded other income of $1.3 million and $3.5 million, respectively, as compared to other expense of $0.4 million and $2.3 million, respectively, in the prior-year periods. The increases in other income for the three-month and nine-month periods ended August 31, 2025 was primarily due to the recognition of foreign exchange management gains of $11.0 million and $41.0 million for the three-month and nine-month periods ended August 31, 2025, respectively, compared to losses of $1.1 million and gains of $1.8 million, respectively, in the prior year periods, partially offset by the recognition of foreign currency transaction losses of $11.1 million and $48.6 million, respectively, compared to transaction losses of $5.8 million and $11.2 million, respectively, in the prior year.
Income tax expense (benefit)
Our effective income tax rate was 21.9% for the three months ended August 31, 2025, compared to (1.9)% for the same prior-year period. The increase in the effective tax rate in the current quarter is primarily due to lower earnings before tax in the prior year.
Our effective income tax rate was 21.5% for the nine months ended August 31, 2025, compared to (39.3)% for the same prior-year period. The increase in the effective tax rate is due to lower earnings before tax in the prior year, and a $10.1 million tax benefit related to favorable resolutions of state audits.
On July 4, 2025, the OBBBA was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We have evaluated the OBBBA enacted during the quarter and estimated its impact on the consolidated financial statements to be immaterial. We will continue to evaluate the full impact of these legislative changes as additional guidance becomes available.
Discontinued operations
Discontinued operations consists of the operations of our Dockers® business. See Note 2 to our unaudited consolidated financial statements included in this Quarterly Report for additional information.
Liquidity and Capital Resources
Liquidity outlook
We believe we will have adequate liquidity over the next 12 months and in the longer term to operate our business and to meet our cash requirements. Over the long term, we plan to deploy capital across all four of our capital allocation priorities: (1) to reinvest 3.5-4% of our revenue in capital, including high growth investment opportunities and initiatives, to grow our business organically, (2) to return capital to our stockholders in the form of cash dividends, with a dividend payout ratio target of 25-35% of net income, (3) to pursue high return on investment acquisitions, both organic and inorganic, that support our current strategies, and (4) to repurchase shares with the goal of offsetting dilution or opportunistic buybacks or both, while maintaining an adequate public float of our shares. Our aim is to return 55-65% of our Adjusted free cash flow to stockholders in the form of dividends and share repurchases. We continue to concentrate our capital investments in new stores, distribution capacity and technology to accelerate the profitable growth of our business. For more information on our calculation of Adjusted free cash flow, a non-GAAP financial measure, see “Non-GAAP Financial Measures.”
Future determinations regarding the declaration and payment of dividends, if any, will be at the discretion of our Board and will depend on then-existing conditions, including our results of operations, payout ratio, capital requirements, financial condition, prospects, contractual arrangements, any limitations on payment of dividends present in our current and future debt agreements and other factors that our Board may deem relevant.
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Cash sources
We have historically relied primarily on cash flows from operations, borrowings under credit facilities, issuances of notes and other forms of debt financing. We regularly explore financing and debt reduction alternatives, including new credit agreements, unsecured and secured note issuances, equity financing, equipment and real estate financing, securitizations and asset sales.
Our Credit Agreement provides for an asset-based, senior secured revolving credit facility (“Credit Facility”), in which the borrowing availability is primarily based on the value of our U.S. Levi’s® trademarks and the levels of accounts receivable and inventory in the U.S. and Canada. The maximum availability under the facility is $1.0 billion, of which $950.0 million is available to us for revolving loans in U.S. Dollars and $50.0 million is available to us for revolving loans either in U.S. Dollars or Canadian Dollars. The facility has an accordion feature which, if exercised, can expand the maximum availability to $1.15 billion.
As of August 31, 2025, we did not have any borrowings under the Credit Facility. Unused availability under the facility was $743.1 million, and our total availability of $762.1 million (based on collateral levels as defined by the agreement less outstanding borrowings under the Credit Facility) was reduced by $19.0 million from other credit-related instruments. We also had cash and cash equivalents totaling approximately $612.8 million and short-term investments of $94.7 million resulting in a total liquidity position (unused availability and cash and cash equivalents) of approximately $1.5 billion. Of our $612.8 million in cash and cash equivalents, approximately $536.1 million was held by foreign subsidiaries.
Cash uses
Our principal cash requirements include working capital, capital expenditures, payments of principal and interest on our debt, payments of taxes, contributions to our pension plans and payments for postretirement health benefit plans, payment of taxes resulting from net settlement of shares issued under our equity incentive plans and, if market conditions warrant, occasional investments in, or acquisitions of, business ventures. In addition, we regularly evaluate our ability to pay dividends or repurchase stock, all consistent with the terms of our debt agreements.
During the first quarter of 2025, we repurchased 1.6 million shares for $30.0 million, plus broker’s commissions, in the open market. On August 1, 2025, the Company entered into an accelerated share repurchase program with a third-party financial institution under which it made an upfront payment of $120.0 million in exchange for an initial delivery of 5.0 million shares of its Class A common stock, representing 80% of the total shares ultimately expected to be delivered over the program's term (the "ASR Agreement"). The initial shares received, which had an aggregate cost of $96.0 million based on the August 1, 2025 closing share price, were retired and recorded as a reduction of Retained Earnings. The total number of shares the Company will ultimately repurchase will be based on the volume-weighted average price per share of the Company's Class A common stock over the term of the ASR Agreement, less an agreed upon discount, and subject to customary adjustments pursuant to the terms and conditions of the ASR Agreement. Final settlement of the transactions under the ASR Agreement is expected to occur no later than the first quarter of 2026. We used a portion of the net proceeds from the sale of Dockers® intellectual property and operations in the U.S. and Canada to fund the upfront payment due under the ASR Agreement. See Note 2 to our unaudited consolidated financial statements included in this Quarterly Report for additional information.
In July 2025, we used the proceeds from the newly issued €475.0 million 4.000% Senior Notes due 2030 plus cash on hand to redeem all of the €475.0 million 3.375% Senior Notes due 2027.
In October 2025, a cash dividend of $0.14 per share was declared to holders of record of our Class A and Class B common stock at the close of business on October 20, 2025. The cash dividend will be payable on November 4, 2025, for a total quarterly dividend of approximately $55 million.
Cash flows
The following table summarizes, for the periods indicated, selected items in our consolidated statements of cash flows:
| Nine Months Ended | |||||||||||
| August 31, 2025 | August 25, 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
Cash provided by operating activities | $ | 262.8 | $ | 601.1 | |||||||
| Cash used for investing activities | (9.7) | (192.2) | |||||||||
Cash used for financing activities | (337.1) | (229.1) | |||||||||
| Cash and cash equivalents at period end | 612.8 | 577.1 | |||||||||
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Cash flows from operating activities
Cash provided by operating activities was $262.8 million for the nine-month period ended August 31, 2025, as compared to $601.1 million for the comparable period in 2024. The decrease in cash provided by operating activities was primarily driven by an increase in SG&A and higher spending on inventory partially offset by higher collections of receivables. In 2024, we also received $77.9 million as an advance payment associated with the transition of our distribution center to a third-party logistics provider.
Cash flows from investing activities
Cash used for investing activities was $9.7 million for the nine-month period ended August 31, 2025, as compared to $192.2 million for the comparable period in 2024. The decrease in net cash used for investing activities was primarily due to net proceeds from the divestiture of Dockers® US and Canada business, higher net proceeds from foreign exchange contracts and proceeds from the sale of assets compared to the same period in 2024, as well as payments to acquire a business in 2024. The decreases are partially offset by payments to acquire short-term investments in 2025.
Cash flows from financing activities
Cash used for financing activities was $337.1 million for the nine-month period ended August 31, 2025, as compared to $229.1 million for the comparable period in 2024. Cash used in 2025 primarily reflects dividend payments of $158.2 million, accelerated share repurchase of $120.0 million, common stock repurchases of $30.5 million, and tax withholdings on equity awards of $20.9 million. Cash used in 2024 primarily reflects dividend payments of $147.1 million, common stock repurchases of $59.7 million, and tax withholdings on equity awards of $21.1 million.
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Indebtedness
The borrower of substantially all of our debt is Levi Strauss & Co., the parent and U.S. operating company. Of our total debt of $1.0 billion as of August 31, 2025, 99.5% was fixed rate debt. As of August 31, 2025, our required aggregate debt principal payments on our unsecured long-term debt were $1.1 billion, with payments starting in 2030. Short-term borrowings of $5.7 million at various foreign subsidiaries are expected to be either paid over the next twelve months or refinanced at the end of their applicable terms.
Our long-term debt agreements contain customary covenants restricting our activities as well as those of our subsidiaries. We were in compliance with all of these covenants as of August 31, 2025.
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Non-GAAP Financial Measures
Adjusted SG&A, Adjusted SG&A margin, Adjusted EBIT, Adjusted EBIT Margin, Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income Margin and Adjusted Diluted Earnings per Share
In the table below, we define non-GAAP measures. Because the results of our Dockers® business are classified as discontinued operations, those results are not reflected in our non-GAAP measures.
| Most comparable GAAP measure | Non-GAAP measure | Non-GAAP measure definition | ||||||||||||
Selling, general and administrative (“SG&A”) expenses | Adjusted SG&A | SG&A expenses excluding property, plant and equipment impairment, restructuring related charges and other, net and acquisition and integration related charges | ||||||||||||
| SG&A margin | Adjusted SG&A margin | Adjusted SG&A as a percentage of net revenues | ||||||||||||
Net income from continuing operations | Adjusted EBIT | Net income from continuing operations excluding income tax expense (benefit), interest expense, other (income) expense, net, property, plant and equipment impairment, goodwill and other intangible asset impairment charges, restructuring charges, net, restructuring related charges and other, net and acquisition and integration related charges | ||||||||||||
Net income margin from continuing operations | Adjusted EBIT margin | Adjusted EBIT as a percentage of net revenues | ||||||||||||
Net income from continuing operations | Adjusted EBITDA | Adjusted EBIT excluding depreciation and amortization expense | ||||||||||||
Net income from continuing operations | Adjusted net income | Net income from continuing operations excluding property, plant and equipment impairment, goodwill and other intangible asset impairment charges, restructuring charges, net, restructuring related charges and other, net, loss on early extinguishment of debt, and acquisition and integration related charges adjusted to give effect to the income tax impact of such adjustments | ||||||||||||
Net income margin from continuing operations | Adjusted net income margin | Adjusted net income as a percentage of net revenues | ||||||||||||
Diluted earnings per share from continuing operations | Adjusted diluted earnings per share | Adjusted net income per weighted-average number of diluted common shares outstanding | ||||||||||||
We believe Adjusted SG&A, Adjusted SG&A margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted EBITDA, Adjusted net income, Adjusted net income margin and Adjusted diluted earnings per share are useful to investors because they help identify underlying trends in our business that could otherwise be masked by certain expenses that we include in calculating net income from continuing operations but that can vary from company to company depending on its financing, capital structure and the method by which its assets were acquired, and can also vary significantly from period to period. Our management also uses Adjusted EBIT in conjunction with other GAAP financial measures for planning purposes, including as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance.
Adjusted SG&A, Adjusted SG&A margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted EBITDA, Adjusted net income, Adjusted net income margin and Adjusted diluted earnings per share have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of our results prepared and presented in accordance with GAAP. Some of these limitations include:
•Adjusted EBIT, Adjusted EBIT margin and Adjusted EBITDA do not reflect income tax payments that reduce cash available to us;
•Adjusted EBIT, Adjusted EBIT margin and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments on our indebtedness, which reduces cash available to us;
•Adjusted EBIT, Adjusted EBIT margin and Adjusted EBITDA exclude other income (expense), net, which includes realized and unrealized gains and losses on our forward foreign exchange contracts and transaction gains and losses on our foreign exchange balances, although these items affect the amount and timing of cash available to us when these gains and losses are realized;
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•all of these non-GAAP financial measures exclude acquisition and integration charges, impairment charges and early terminations and restructuring charges, net and restructuring related charges, severance and other, net which can affect our current and future cash requirements;
•all of these non-GAAP financial measures exclude certain other SG&A expense items, which include severance, transaction and deal related costs, including acquisition and integration costs which can affect our current and future cash requirements;
•the expenses and other items that we exclude in our calculations of all of these non-GAAP financial measures may differ from the expenses and other items, if any, that other companies may exclude from all of these non-GAAP financial measures or similarly titled measures;
•Adjusted EBITDA excludes the recurring, non-cash expenses of depreciation of property and equipment and, although these are non-cash expenses, the assets being depreciated may need to be replaced in the future; and
•Adjusted net income, Adjusted net income margin and Adjusted diluted earnings per share do not include all of the effects of income taxes and changes in income taxes reflected in net income from continuing operations.
Because of these limitations, all of these non-GAAP financial measures should be considered along with net income from continuing operations and other operating and financial performance measures prepared and presented in accordance with GAAP. The following tables present reconciliations of historic non-GAAP financial measures to their most comparable GAAP financial measure. A reconciliation of forward-looking non-GAAP information to the corresponding GAAP measures cannot be provided without unreasonable efforts due to the challenge in quantifying various items including, but not limited to, the effects of foreign currency fluctuations, taxes and any future restructuring, restructuring-related severance and other charges.
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Adjusted SG&A:
The following table presents a reconciliation of SG&A, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted SG&A for each of the periods presented.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | August 31, 2025 | August 25, 2024 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Most comparable GAAP measure: | |||||||||||||||||||||||
| Selling, general and administrative expenses | $ | 775.6 | $ | 726.4 | $ | 2,313.4 | $ | 2,233.4 | |||||||||||||||
| Non-GAAP measure: | |||||||||||||||||||||||
| Selling, general and administrative expenses | $ | 775.6 | $ | 726.4 | $ | 2,313.4 | $ | 2,233.4 | |||||||||||||||
Property, plant, and equipment impairment(1) | — | (11.1) | — | (11.1) | |||||||||||||||||||
Restructuring related charges and other, net(2) | (6.3) | (19.2) | (14.0) | (44.6) | |||||||||||||||||||
Acquisition and integration related charges(3) | — | — | — | (4.0) | |||||||||||||||||||
| Adjusted SG&A | $ | 769.3 | $ | 696.1 | $ | 2,299.4 | $ | 2,173.7 | |||||||||||||||
| SG&A margin | 50.3 | % | 50.3 | % | 51.2 | % | 52.2 | % | |||||||||||||||
| Adjusted SG&A margin | 49.8 | % | 48.2 | % | 50.9 | % | 50.8 | % | |||||||||||||||
| (1) | For the three-month and nine-month periods ended August 25, 2024, property, plant, and equipment impairment primarily includes $11.1 million of impairments related to the technology projects discontinued as a result of Project Fuel. | ||||
| (2) | For the three-month period ended August 31, 2025, restructuring related and other charges, net primarily consists of $4.3 million of Project Fuel restructuring related costs which includes consulting costs, distribution center transition costs, and employee one-time incentives, as well as other costs including estimated legal settlements of $2.0 million. | ||||
| For the nine-month period ended August 31, 2025, restructuring related and other charges, net primarily consists of $11.8 million of Project Fuel related costs which includes consulting costs, distribution center transition costs, and employee one-time incentives, as well as other costs including estimated legal settlements of $2.0 million. | |||||
| For the three-month period ended August 25, 2024, restructuring related charges and other, net primarily relates to consulting costs associated with our restructuring initiative of $19.0 million, an estimated legal settlement accrual of $4.0 million and certain executive separation charges of $0.5 million, offset by a favorable sales-tax related settlement of $4.4 million. | |||||
| For the nine-month period ended August 25, 2024, restructuring related charges and other, net primarily relates to consulting costs associated with our restructuring initiative of $34.3 million, legal settlements of $9.5 million, certain executive separation charges of $2.7 million and transaction and deal related costs of $1.7 million, offset by a favorable sales-tax related settlement of $4.4 million. | |||||
| (3) | Acquisition and integration related charges includes acquisition-related compensation subject to the continued employment of certain Beyond Yoga® employees. In the first quarter of 2024, their employment ceased, resulting in the acceleration of the remaining compensation. | ||||
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Adjusted EBIT and Adjusted EBITDA:
The following table presents a reconciliation of net income from continuing operations, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBIT and Adjusted EBITDA for each of the periods presented.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | August 31, 2025 | August 25, 2024 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Most comparable GAAP measure: | |||||||||||||||||||||||
| Net income from continuing operations | $ | 122.0 | $ | 22.7 | $ | 341.8 | $ | 30.0 | |||||||||||||||
| Non-GAAP measure: | |||||||||||||||||||||||
Net income from continuing operations | $ | 122.0 | $ | 22.7 | $ | 341.8 | $ | 30.0 | |||||||||||||||
Income tax expense (benefit) | 34.2 | (0.5) | 93.5 | (8.5) | |||||||||||||||||||
| Interest expense | 12.5 | 10.1 | 35.2 | 30.4 | |||||||||||||||||||
Other (income) expense, net | (1.3) | 0.4 | (3.5) | 2.3 | |||||||||||||||||||
Property, plant, and equipment impairment(1) | — | 11.1 | — | 11.1 | |||||||||||||||||||
Goodwill and other intangible asset impairment charges(2) | — | 111.4 | 2.5 | 116.9 | |||||||||||||||||||
Restructuring charges, net(3) | 8.6 | 3.4 | 22.1 | 171.6 | |||||||||||||||||||
Restructuring related charges and other, net(4) | 6.3 | 19.2 | 14.0 | 44.6 | |||||||||||||||||||
Acquisition and integration related charges(5) | — | — | — | 4.0 | |||||||||||||||||||
| Adjusted EBIT | $ | 182.3 | $ | 177.8 | $ | 505.6 | $ | 402.4 | |||||||||||||||
Depreciation and amortization | 51.7 | 48.8 | 151.2 | 136.4 | |||||||||||||||||||
Adjusted EBITDA | $ | 234.0 | $ | 226.6 | $ | 656.8 | $ | 538.8 | |||||||||||||||
Net income margin from continuing operations | 7.9 | % | 1.6 | % | 7.6 | % | 0.7 | % | |||||||||||||||
Adjusted EBIT margin | 11.8 | % | 12.3 | % | 11.2 | % | 9.4 | % | |||||||||||||||
_____________
| (1) | For the three-month and nine-month periods ended August 25, 2024, property, plant, and equipment impairment primarily includes $11.1 million of impairments related to the technology projects discontinued as a result of Project Fuel. | ||||
| (2) | For the nine-month period ended August 31, 2025, goodwill impairment charges includes the recognition of a $2.5 million goodwill impairment charge related to our business in Bolivia. | ||||
| For the three-month and nine-month periods ended August 25, 2024, goodwill and other intangible asset impairment charges includes impairment charges of $36.3 million related to Beyond Yoga® reporting unit goodwill, $66.0 million related to the Beyond Yoga® trademark and $9.1 million Beyond Yoga® customer relationship intangible assets. Additionally, the nine-month period ended August 25, 2024 includes a $5.5 million goodwill impairment charge related to our footwear business. | |||||
| (3) | For the three-month period ended August 31, 2025, restructuring charges, net includes $8.6 million in connection with Project Fuel, primarily consisting of severance and other post-employment benefit charges. | ||||
| For the nine-month period ended August 31, 2025, restructuring charges, net includes $22.1 million in connection with Project Fuel consisting of $9.2 million of asset impairment in connection with the closures of distribution centers, $18.3 million of severance and other post-employment benefit charges, and $3.9 million of contract terminations and other costs, partially offset by a $9.3 million gain on the sale of a previously closed distribution center. | |||||
| For the three-month and nine-month periods ended August 25, 2024, restructuring charges, net includes $3.4 million and $171.6 million, respectively, in connection with Project Fuel consisting primarily of severance and other post-employment benefit charges. | |||||
| (4) | For the three-month period ended August 31, 2025, restructuring related and other charges, net primarily consists of $4.3 million of Project Fuel restructuring related costs which includes consulting costs, distribution center transition costs, and employee one-time incentives, as well as other costs including estimated legal settlements of $2.0 million. | ||||
| For the nine-month period ended August 31, 2025, restructuring related and other charges, net primarily consists of $11.8 million of Project Fuel related costs which includes consulting costs, distribution center transition costs, and employee one-time incentives, as well as other costs including estimated legal settlements of $2.0 million. | |||||
| For the three-month period ended August 25, 2024, restructuring related charges and other, net primarily relates to consulting costs associated with our restructuring initiative of $19.0 million, an estimated legal settlement accrual of $4.0 million and certain executive separation charges of $0.5 million, offset by a favorable sales-tax related settlement of $4.4 million. | |||||
| For the nine-month period ended August 25, 2024, restructuring related charges and other, net primarily relates to consulting costs associated with our restructuring initiative of $34.3 million, legal settlements of $9.5 million, certain executive separation charges of $2.7 million and transaction and deal related costs of $1.7 million, offset by a favorable sales-tax related settlement of $4.4 million. | |||||
| (5) | Acquisition and integration related charges includes acquisition-related compensation subject to the continued employment of certain Beyond Yoga® employees. In the first quarter of 2024, their employment ceased, resulting in the acceleration of the remaining compensation. | ||||
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Adjusted Net Income:
The following table presents a reconciliation of net income from continuing operations, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted net income for each of the periods presented.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | August 31, 2025 | August 25, 2024 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Most comparable GAAP measure: | |||||||||||||||||||||||
Net income from continuing operations | $ | 122.0 | $ | 22.7 | $ | 341.8 | $ | 30.0 | |||||||||||||||
| Non-GAAP measure: | |||||||||||||||||||||||
Net income from continuing operations | $ | 122.0 | $ | 22.7 | $ | 341.8 | $ | 30.0 | |||||||||||||||
Property, plant, and equipment impairment(1) | — | 11.1 | — | 11.1 | |||||||||||||||||||
Goodwill and other intangible asset impairment charges(2) | — | 111.4 | 2.5 | 116.9 | |||||||||||||||||||
Restructuring charges, net(3) | 8.6 | 3.4 | 22.1 | 171.6 | |||||||||||||||||||
Restructuring related charges and other, net(4) | 7.4 | 15.1 | 15.1 | 40.5 | |||||||||||||||||||
Loss on early extinguishment of debt | 1.5 | — | 1.5 | — | |||||||||||||||||||
Acquisition and integration related charges(5) | — | — | — | 4.0 | |||||||||||||||||||
Tax impact of adjustments(6) | (3.8) | (29.8) | (8.8) | (74.6) | |||||||||||||||||||
Adjusted net income | $ | 135.7 | $ | 133.9 | $ | 374.2 | $ | 299.5 | |||||||||||||||
Net income margin from continuing operations | 7.9 | % | 1.6 | % | 7.6 | % | 0.7 | % | |||||||||||||||
Adjusted net income margin | 8.8 | % | 9.3 | % | 8.3 | % | 7.0 | % | |||||||||||||||
| (1) | For the three-month and nine-month periods ended August 25, 2024, property, plant, and equipment impairment primarily includes $11.1 million of impairments related to the technology projects discontinued as a result of Project Fuel. | ||||
| (2) | For the nine-month period ended August 31, 2025, goodwill impairment charges includes the recognition of a $2.5 million goodwill impairment charge related to our business in Bolivia. | ||||
| For the three-month and nine-month periods ended August 25, 2024, goodwill and other intangible asset impairment charges includes impairment charges of $36.3 million related to Beyond Yoga® reporting unit goodwill, $66.0 million related to the Beyond Yoga® trademark and $9.1 million Beyond Yoga® customer relationship intangible assets. Additionally, the nine-month period ended August 25, 2024 includes a $5.5 million goodwill impairment charge related to our footwear business. | |||||
| (3) | For the three-month period ended August 31, 2025, restructuring charges, net includes $8.6 million in connection with Project Fuel, primarily consisting of severance and other post-employment benefit charges. | ||||
| For the nine-month period ended August 31, 2025, restructuring charges, net includes $22.1 million in connection with Project Fuel consisting of $9.2 million of asset impairment in connection with the closures of distribution centers, $18.3 million of severance and other post-employment benefit charges, and $3.9 million of contract terminations and other costs, partially offset by a $9.3 million gain on the sale of a previously closed distribution center. | |||||
| For the three-month and nine-month periods ended August 25, 2024, restructuring charges, net includes $3.4 million and $171.6 million, respectively, in connection with Project Fuel consisting primarily of severance and other post-employment benefit charges. | |||||
| (4) | For the three-month period ended August 31, 2025, restructuring related and other charges, net primarily consists of $4.3 million of Project Fuel restructuring related costs which includes consulting costs, distribution center transition costs, and employee one-time incentives, as well as other costs including estimated legal settlements of $2.0 million. It additionally includes subrogation related to an insurance recovery of $1.1 million which was recorded within other income (expense). | ||||
| For the nine-month period ended August 31, 2025, restructuring related and other charges, net primarily consists of $11.8 million of Project Fuel related costs which includes consulting costs, distribution center transition costs, and employee one-time incentives, as well as other costs including estimated legal settlements of $2.0 million. It additionally includes subrogation related to an insurance recovery of $1.1 million which was recorded within other income (expense). | |||||
| For the three-month period ended August 25, 2024, restructuring related charges and other, net primarily relates to consulting costs associated with our restructuring initiative of $19.0 million, an estimated legal settlement accrual of $4.0 million and certain executive separation charges of $0.5 million, offset by a favorable sales-tax related settlement of $4.4 million, as well as an insurance recovery of $2.7 million and a government subsidy gain of $1.4 million, both of which were recorded within other income (expense), net. | |||||
| For the nine-month period ended August 25, 2024, restructuring related charges and other, net primarily relates to consulting costs associated with our restructuring initiative of $34.3 million, legal settlements of $9.5 million, certain executive separation charges of $2.7 million and transaction and deal related costs of $1.7 million, offset by a favorable sales-tax related settlement of $4.4 million, as well as an insurance recovery of $2.7 million and a government subsidy gain of $1.4 million, both of which were recorded within other income (expense), net. | |||||
| (5) | Acquisition and integration related charges includes acquisition-related compensation subject to the continued employment of certain Beyond Yoga® employees. In the first quarter of 2024, their employment ceased, resulting in the acceleration of the remaining compensation. | ||||
| (6) | Tax impact calculated using the annual effective tax rate, excluding discrete costs and benefits. | ||||
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Adjusted Diluted Earnings per Share:
The following table presents a reconciliation of diluted earnings per share from continuing operations, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted diluted earnings per share for each of the periods presented.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | August 31, 2025 | August 25, 2024 | ||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Most comparable GAAP measure: | |||||||||||||||||||||||
Diluted earnings per share from continuing operations | $ | 0.31 | $ | 0.06 | $ | 0.86 | $ | 0.07 | |||||||||||||||
| Non-GAAP measure: | |||||||||||||||||||||||
Diluted earnings per share from continuing operations | $ | 0.31 | $ | 0.06 | $ | 0.86 | $ | 0.07 | |||||||||||||||
Property, plant, and equipment impairment(1) | — | 0.03 | — | 0.03 | |||||||||||||||||||
Goodwill and other intangible asset impairment charges(2) | — | 0.28 | 0.01 | 0.30 | |||||||||||||||||||
Restructuring charges, net(3) | 0.02 | 0.01 | 0.06 | 0.43 | |||||||||||||||||||
Restructuring related charges and other, net(4) | 0.02 | 0.04 | 0.04 | 0.10 | |||||||||||||||||||
Loss on early extinguishment of debt | — | — | — | — | |||||||||||||||||||
Acquisition and integration related charges(5) | — | — | — | 0.01 | |||||||||||||||||||
Tax impact of adjustments(6) | (0.01) | (0.09) | (0.03) | (0.19) | |||||||||||||||||||
Adjusted diluted earnings per share | $ | 0.34 | $ | 0.33 | $ | 0.94 | $ | 0.75 | |||||||||||||||
_____________
| (1) | For the three-month and nine-month periods ended August 25, 2024, property, plant, and equipment impairment primarily includes $11.1 million of impairments related to the technology projects discontinued as a result of Project Fuel. | ||||
| (2) | For the nine-month period ended August 31, 2025, goodwill impairment charges includes the recognition of a $2.5 million goodwill impairment charge related to our business in Bolivia. | ||||
| For the three-month and nine-month periods ended August 25, 2024, goodwill and other intangible asset impairment charges includes impairment charges of $36.3 million related to Beyond Yoga® reporting unit goodwill, $66.0 million related to the Beyond Yoga® trademark and $9.1 million Beyond Yoga® customer relationship intangible assets. Additionally, the nine-month period ended August 25, 2024 includes a $5.5 million goodwill impairment charge related to our footwear business. | |||||
| (3) | For the three-month period ended August 31, 2025, restructuring charges, net includes $8.6 million in connection with Project Fuel, primarily consisting of severance and other post-employment benefit charges. | ||||
| For the nine-month period ended August 31, 2025, restructuring charges, net includes $22.1 million in connection with Project Fuel consisting of $9.2 million of asset impairment in connection with the closures of distribution centers, $18.3 million of severance and other post-employment benefit charges, and $3.9 million of contract terminations and other costs, partially offset by a $9.3 million gain on the sale of a previously closed distribution center. | |||||
| For the three-month and nine-month periods ended August 25, 2024, restructuring charges, net includes $3.4 million and $171.6 million, respectively, in connection with Project Fuel consisting primarily of severance and other post-employment benefit charges. | |||||
| (4) | For the three-month period ended August 31, 2025, restructuring related and other charges, net primarily consists of $4.3 million of Project Fuel restructuring related costs which includes consulting costs, distribution center transition costs, and employee one-time incentives, as well as other costs including estimated legal settlements of $2.0 million. It additionally includes subrogation related to an insurance recovery of $1.1 million which was recorded within other income (expense). | ||||
| For the nine-month period ended August 31, 2025, restructuring related and other charges, net primarily consists of $11.8 million of Project Fuel related costs which includes consulting costs, distribution center transition costs, and employee one-time incentives, as well as other costs including estimated legal settlements of $2.0 million. It additionally includes subrogation related to an insurance recovery of $1.1 million which was recorded within other income (expense). | |||||
| For the three-month period ended August 25, 2024, restructuring related charges and other, net primarily relates to consulting costs associated with our restructuring initiative of $19.0 million, an estimated legal settlement accrual of $4.0 million and certain executive separation charges of $0.5 million, offset by a favorable sales-tax related settlement of $4.4 million, as well as an insurance recovery of $2.7 million and a government subsidy gain of $1.4 million, both of which were recorded within other income (expense), net. | |||||
| For the nine-month period ended August 25, 2024, restructuring related charges and other, net primarily relates to consulting costs associated with our restructuring initiative of $34.3 million, legal settlements of $9.5 million, certain executive separation charges of $2.7 million and transaction and deal related costs of $1.7 million, offset by a favorable sales-tax related settlement of $4.4 million, as well as an insurance recovery of $2.7 million and a government subsidy gain of $1.4 million, both of which were recorded within other income (expense), net. | |||||
| (5) | Acquisition and integration related charges includes acquisition-related compensation subject to the continued employment of certain Beyond Yoga® employees. In the first quarter of 2024, their employment ceased, resulting in the acceleration of the remaining compensation. | ||||
| (6) | Tax impact calculated using the annual effective tax rate, excluding discrete costs and benefits. | ||||
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Adjusted Free Cash Flow:
Adjusted free cash flow, a non-GAAP financial measure, includes net cash flow from operating activities less purchases of property, plant and equipment from continuing and discontinued operations. This measure therefore includes the results of our Dockers® business, which is classified as discontinued operations. We believe Adjusted free cash flow is an important liquidity measure of the cash that is available after capital expenditures for operational expenses and investment in our business. We believe Adjusted free cash flow is useful to investors because it measures our ability to generate or use cash. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet, invest in future growth and return capital to stockholders.
Our use of Adjusted free cash flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results under GAAP. First, Adjusted free cash flow is not a substitute for net cash flow from operating activities. Second, other companies may calculate Adjusted free cash flow or similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of Adjusted free cash flow as a tool for comparison. Additionally, the utility of Adjusted free cash flow is further limited as it does not reflect our future contractual commitments and does not represent the total increase or decrease in our cash balance for a given period. Because of these and other limitations, Adjusted free cash flow should be considered along with net cash flow from operating activities and other comparable financial measures prepared and presented in accordance with GAAP.
The following table presents a reconciliation of net cash flow from operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted free cash flow for each of the periods presented.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | August 31, 2025 | August 25, 2024 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Most comparable GAAP measure: | |||||||||||||||||||||||
Net cash provided by operating activities | $ | 24.8 | $ | 52.3 | $ | 262.8 | $ | 601.1 | |||||||||||||||
Net cash provided by (used for) investing activities | 120.0 | (50.8) | (9.7) | (192.2) | |||||||||||||||||||
Net cash used for financing activities | (184.7) | (66.2) | (337.1) | (229.1) | |||||||||||||||||||
| Non-GAAP measure: | |||||||||||||||||||||||
Net cash provided by operating activities | $ | 24.8 | $ | 52.3 | $ | 262.8 | $ | 601.1 | |||||||||||||||
| Purchases of property, plant and equipment | (64.2) | (50.0) | (170.3) | (161.8) | |||||||||||||||||||
| Adjusted free cash flow | $ | (39.4) | $ | 2.3 | $ | 92.5 | $ | 439.3 | |||||||||||||||
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Organic Net Revenues and Constant-Currency:
We report our net revenues in accordance with GAAP, as well as on an organic net revenues basis in order to facilitate period-to-period comparisons of our revenues which excludes the impact of fluctuating foreign currency exchange rates from the change in reported net revenues, net revenues derived from business acquisitions or divestitures impacting the previous comparable reporting period and the estimated impact of any 53rd week. We report our operating results in accordance with GAAP, as well as on a constant-currency basis in order to facilitate period-to-period comparisons of our results without regard to the impact of fluctuating foreign currency exchange rates. These measures exclude the results of our Dockers® business, which is classified as discontinued operations.
The term foreign currency exchange rates refers to the exchange rates we use to translate our operating results for all countries where the functional currency is not the U.S. Dollar into U.S. Dollars. Because we are a global company, foreign currency exchange rates used for translation may have a significant effect on our reported results. In general, our reported financial results are affected positively by a weaker U.S. Dollar and are affected negatively by a stronger U.S. Dollar as compared to the foreign currencies in which we conduct our business. References to our operating results on a constant-currency basis mean our operating results without the impact of foreign currency translation fluctuations.
We calculate constant-currency amounts by translating local currency amounts in the prior-year period at actual foreign exchange rates for the current period. Our constant-currency results do not eliminate the transaction currency impact, which primarily includes the realized and unrealized gains and losses recognized from the measurement and remeasurement of purchases and sales of products in a currency other than the functional currency.
We believe disclosure of organic net revenues and Adjusted EBIT constant-currency, Adjusted EBIT Margin constant-currency and Adjusted Net Income constant-currency results is helpful to investors because it facilitates period-to-period comparisons of our results by increasing the transparency of our underlying performance by excluding the impact of fluctuating foreign currency exchange rates. However, organic net revenues and constant-currency results are non-GAAP financial measures and are not meant to be considered in isolation or as a substitute for comparable measures prepared in accordance with GAAP. Organic net revenues and constant-currency results have no standardized meaning prescribed by GAAP, are not prepared under any comprehensive set of accounting rules or principles and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. Organic net revenues and constant-currency results have limitations in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies.
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Organic Net Revenues:
The table below sets forth the calculation of net revenues by segment on an organic net revenues basis for each of the periods presented.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | % Increase (Decrease) | August 31, 2025 | August 25, 2024 | % Increase (Decrease) | ||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||
Total net revenues(1) | |||||||||||||||||||||||||||||||||||
| As reported | $ | 1,543.4 | $ | 1,443.1 | 7.0 | % | $ | 4,516.2 | $ | 4,282.1 | 5.5 | % | |||||||||||||||||||||||
| Impact of foreign currency exchange rates | — | 26.6 | — | (27.1) | |||||||||||||||||||||||||||||||
Net revenues from Denizen® divestiture | — | (3.2) | (2.3) | (27.0) | |||||||||||||||||||||||||||||||
Net revenues from Footwear category divestiture | — | (22.1) | — | (50.3) | |||||||||||||||||||||||||||||||
| Organic net revenues | $ | 1,543.4 | $ | 1,444.4 | 6.9 | % | $ | 4,513.9 | $ | 4,177.7 | 8.0 | % | |||||||||||||||||||||||
| Americas | |||||||||||||||||||||||||||||||||||
| As reported | $ | 806.4 | $ | 757.2 | 6.5 | % | $ | 2,337.8 | $ | 2,205.2 | 6.0 | % | |||||||||||||||||||||||
| Impact of foreign currency exchange rates | — | (2.3) | — | (36.3) | |||||||||||||||||||||||||||||||
Net revenues from Denizen® divestiture | — | (3.2) | (2.3) | (27.0) | |||||||||||||||||||||||||||||||
| Organic net revenues - Americas | $ | 806.4 | $ | 751.7 | 7.3 | % | $ | 2,335.5 | $ | 2,141.9 | 9.0 | % | |||||||||||||||||||||||
| Europe | |||||||||||||||||||||||||||||||||||
| As reported | $ | 426.3 | $ | 406.6 | 4.8 | % | $ | 1,229.9 | $ | 1,183.8 | 3.9 | % | |||||||||||||||||||||||
| Impact of foreign currency exchange rates | — | 28.8 | — | 20.5 | |||||||||||||||||||||||||||||||
Net revenues from Footwear category divestiture | — | (22.1) | — | (50.3) | |||||||||||||||||||||||||||||||
| Organic net revenues - Europe | $ | 426.3 | $ | 413.3 | 3.1 | % | $ | 1,229.9 | $ | 1,154.0 | 6.6 | % | |||||||||||||||||||||||
| Asia | |||||||||||||||||||||||||||||||||||
| As reported | $ | 277.7 | $ | 247.1 | 12.4 | % | $ | 843.5 | $ | 795.9 | 6.0 | % | |||||||||||||||||||||||
| Impact of foreign currency exchange rates | — | 0.1 | — | (11.3) | |||||||||||||||||||||||||||||||
| Organic net revenues - Asia | $ | 277.7 | $ | 247.2 | 12.3 | % | $ | 843.5 | $ | 784.6 | 7.5 | % | |||||||||||||||||||||||
Beyond Yoga® | |||||||||||||||||||||||||||||||||||
| As reported | $ | 33.0 | $ | 32.2 | 2.5 | % | $ | 105.0 | $ | 97.2 | 8.0 | % | |||||||||||||||||||||||
Organic net revenues - Beyond Yoga® | $ | 33.0 | $ | 32.2 | 2.5 | % | $ | 105.0 | $ | 97.2 | 8.0 | % | |||||||||||||||||||||||
| (1) | These measures exclude the results of our Dockers® business, which is classified as discontinued operations. | ||||
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The table below sets forth the calculation of net revenues by channel on an organic net revenue basis for each of the periods presented.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | % Increase (Decrease) | August 31, 2025 | August 25, 2024 | % Increase (Decrease) | ||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||
Total net revenues(1) | |||||||||||||||||||||||||||||||||||
| As reported | $ | 1,543.4 | $ | 1,443.1 | 7.0 | % | $ | 4,516.2 | $ | 4,282.1 | 5.5 | % | |||||||||||||||||||||||
| Impact of foreign currency exchange rates | — | 26.6 | — | (27.1) | |||||||||||||||||||||||||||||||
Net revenues from Denizen® divestiture | — | (3.2) | (2.3) | (27.0) | |||||||||||||||||||||||||||||||
Net revenues from Footwear category divestiture | — | (22.1) | — | (50.3) | |||||||||||||||||||||||||||||||
| Organic net revenues | $ | 1,543.4 | $ | 1,444.4 | 6.9 | % | $ | 4,513.9 | $ | 4,177.7 | 8.0 | % | |||||||||||||||||||||||
Wholesale | |||||||||||||||||||||||||||||||||||
| As reported | $ | 832.2 | $ | 804.1 | 3.5 | % | $ | 2,301.4 | $ | 2,273.3 | 1.2 | % | |||||||||||||||||||||||
| Impact of foreign currency exchange rates | — | 11.8 | — | (21.2) | |||||||||||||||||||||||||||||||
Net revenues from Denizen® divestiture | — | (3.2) | (2.3) | (27.0) | |||||||||||||||||||||||||||||||
Net revenues from Footwear category divestiture | — | (22.1) | — | (50.3) | |||||||||||||||||||||||||||||||
Organic net revenues - Wholesale | $ | 832.2 | $ | 790.6 | 5.3 | % | $ | 2,299.1 | $ | 2,174.8 | 5.7 | % | |||||||||||||||||||||||
DTC | |||||||||||||||||||||||||||||||||||
| As reported | $ | 711.2 | $ | 639.0 | 11.3 | % | $ | 2,214.8 | $ | 2,008.8 | 10.3 | % | |||||||||||||||||||||||
| Impact of foreign currency exchange rates | — | 14.8 | — | (5.9) | |||||||||||||||||||||||||||||||
Organic net revenues - DTC | $ | 711.2 | $ | 653.8 | 8.8 | % | $ | 2,214.8 | $ | 2,002.9 | 10.6 | % | |||||||||||||||||||||||
| (1) | These measures exclude the results of our Dockers® business, which is classified as discontinued operations. | ||||
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The table below sets forth the calculation of net revenues by brand on an organic net revenue basis for each of the periods presented.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | % Increase (Decrease) | August 31, 2025 | August 25, 2024 | % Increase (Decrease) | ||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||
Total Levi’s Brands net revenues(1) | |||||||||||||||||||||||||||||||||||
| As reported | $ | 1,510.4 | $ | 1,410.9 | 7.1 | % | $ | 4,411.2 | $ | 4,184.9 | 5.4 | % | |||||||||||||||||||||||
| Impact of foreign currency exchange rates | — | 26.6 | — | (27.1) | |||||||||||||||||||||||||||||||
Net revenues from Denizen® divestiture | — | (3.2) | (2.3) | (27.0) | |||||||||||||||||||||||||||||||
Net revenues from Footwear category divestiture | — | (22.1) | — | (50.3) | |||||||||||||||||||||||||||||||
| Organic net revenues | $ | 1,510.4 | $ | 1,412.2 | 7.0 | % | $ | 4,408.9 | $ | 4,080.5 | 8.0 | % | |||||||||||||||||||||||
Levi’s® | |||||||||||||||||||||||||||||||||||
| As reported | $ | 1,450.8 | $ | 1,358.5 | 6.8 | % | $ | 4,236.4 | $ | 4,004.3 | 5.8 | % | |||||||||||||||||||||||
| Impact of foreign currency exchange rates | — | 26.6 | — | (26.1) | |||||||||||||||||||||||||||||||
Net revenues from Footwear category divestiture | — | (22.1) | — | (50.3) | |||||||||||||||||||||||||||||||
Organic net revenues - Levi’s® | $ | 1,450.8 | $ | 1,363.0 | 6.4 | % | $ | 4,236.4 | $ | 3,927.9 | 7.9 | % | |||||||||||||||||||||||
Levi Strauss SignatureTM | |||||||||||||||||||||||||||||||||||
| As reported | $ | 59.6 | $ | 49.2 | 21.1 | % | $ | 172.5 | $ | 152.9 | 12.8 | % | |||||||||||||||||||||||
Impact of foreign currency exchange rates | — | — | — | (0.3) | |||||||||||||||||||||||||||||||
Organic net revenues - Levi Strauss SignatureTM | $ | 59.6 | $ | 49.2 | 21.1 | % | $ | 172.5 | $ | 152.6 | 13.0 | % | |||||||||||||||||||||||
Denizen® | |||||||||||||||||||||||||||||||||||
| As reported | $ | — | $ | 3.2 | (100.0) | % | $ | 2.3 | $ | 27.7 | (91.7) | % | |||||||||||||||||||||||
Impact of foreign currency exchange rates | — | — | — | (0.7) | |||||||||||||||||||||||||||||||
Net revenues from Denizen® divestiture | — | (3.2) | (2.3) | (27.0) | |||||||||||||||||||||||||||||||
Organic net revenues - Denizen® | $ | — | $ | — | * | $ | — | $ | — | * | |||||||||||||||||||||||||
_____________
| (1) | These measures exclude the results of our Dockers® business, which is classified as discontinued operations. | ||||
* Not meaningful
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Constant-Currency Adjusted EBIT and Constant-Currency Adjusted EBIT margin:
The table below sets forth the calculation of Adjusted EBIT and Adjusted EBIT margin on a constant-currency basis for each of the periods presented.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | % Increase (Decrease) | August 31, 2025 | August 25, 2024 | % Increase (Decrease) | ||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||
Adjusted EBIT(1) | $ | 182.3 | $ | 177.8 | 2.5 | % | $ | 505.6 | $ | 402.4 | 25.6 | % | |||||||||||||||||||||||
| Impact of foreign currency exchange rates | — | 6.2 | * | — | (5.4) | * | |||||||||||||||||||||||||||||
Constant-currency Adjusted EBIT | $ | 182.3 | $ | 184.0 | (0.9) | % | $ | 505.6 | $ | 397.0 | 27.4 | % | |||||||||||||||||||||||
Adjusted EBIT margin | 11.8 | % | 12.3 | % | (4.1) | % | 11.2 | % | 9.4 | % | 19.1 | % | |||||||||||||||||||||||
| Impact of foreign currency exchange rates | — | 0.2 | * | — | (0.1) | * | |||||||||||||||||||||||||||||
Constant-currency Adjusted EBIT margin(2) | 11.8 | % | 12.5 | % | (5.6) | % | 11.2 | % | 9.3 | % | 20.4 | % | |||||||||||||||||||||||
_____________
| (1) | Adjusted EBIT is reconciled from net income from continuing operations which is the most comparable GAAP measure. Refer to Adjusted EBIT and Adjusted EBITDA table for more information. | ||||
| (2) | We define constant-currency Adjusted EBIT margin as constant-currency Adjusted EBIT as a percentage of constant-currency net revenues from continuing operations. | ||||
* Not meaningful
Constant-Currency Adjusted Net Income and Constant-Currency Adjusted Diluted Earnings per Share:
The table below sets forth the calculation of Adjusted net income and Adjusted diluted earnings per share on a constant-currency basis for each of the periods presented.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
| August 31, 2025 | August 25, 2024 | % Increase (Decrease) | August 31, 2025 | August 25, 2024 | % Increase (Decrease) | ||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts) | |||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||
Adjusted net income(1) | $ | 135.7 | $ | 133.9 | 1.3 | % | $ | 374.2 | $ | 299.5 | 24.9 | % | |||||||||||||||||||||||
| Impact of foreign currency exchange rates | — | 2.6 | * | — | (2.6) | * | |||||||||||||||||||||||||||||
Constant-currency Adjusted net income | $ | 135.7 | $ | 136.5 | (0.6) | % | $ | 374.2 | $ | 296.9 | 26.0 | % | |||||||||||||||||||||||
Constant-currency Adjusted net income margin(2) | 8.8 | % | 9.3 | % | 8.3 | % | 7.0 | % | |||||||||||||||||||||||||||
Adjusted diluted earnings per share | $ | 0.34 | $ | 0.33 | 3.0 | % | $ | 0.94 | $ | 0.75 | 25.3 | % | |||||||||||||||||||||||
| Impact of foreign currency exchange rates | — | 0.01 | * | — | (0.01) | * | |||||||||||||||||||||||||||||
Constant-currency Adjusted diluted earnings per share | $ | 0.34 | $ | 0.34 | — | % | $ | 0.94 | $ | 0.74 | 27.0 | % | |||||||||||||||||||||||
_____________
| (1) | Adjusted net income is reconciled from net income from continuing operations which is the most comparable GAAP measure. Refer to Adjusted net income table for more information. | ||||
| (2) | We define constant-currency Adjusted net income margin as constant-currency Adjusted net income as a percentage of constant-currency net revenues. | ||||
* Not meaningful
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Off-Balance Sheet Arrangements, Guarantees and Other Contingent Obligations
As of August 31, 2025, there had been no significant changes to our off-balance sheet arrangements or contractual commitments from those disclosed in our 2024 Annual Report on Form 10-K.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the related notes. There have been no significant changes to our critical accounting policies from those disclosed in our 2024 Annual Report on Form 10-K, other than described below.
During the third quarter of 2025, as part of the Company’s annual review of the Beyond Yoga® reporting unit, the Company elected to perform a single step quantitative impairment test on the goodwill and indefinite lived trademark intangible assigned to the Beyond Yoga® reporting unit. The Company engaged third-party valuation specialists and used industry accepted valuation models and criteria that were reviewed and approved by various levels of management. Although the fair values of the Beyond Yoga® reporting unit and the indefinite lived trademark intangible exceeded their carrying values, the fair values of the Beyond Yoga® reporting unit and the indefinite lived trademark intangible were less than 10% over their carrying values. Determination of fair values is judgmental in nature and often involves the use of significant estimates and assumptions, which may include revenue growth rates, profit margins, operating expenses, capital expenditures, terminal value, a royalty rate and a discount rate. As our long-term strategies change, planned business performance expectations are not met over time, or specific valuation factors outside of our control, such as discount rates, change significantly, then the estimated fair values of the Beyond Yoga® reporting unit or the Beyond Yoga® indefinite-lived trademark intangible asset, or both might decline and lead to impairment charges in the future. Several factors could impact the Beyond Yoga® brand's ability to achieve expected future cash flows, including the success of retail store and international expansion, store and e-commerce productivity, the impact of promotional activity, continued economic volatility and potential operational challenges related to macroeconomic factors and other strategic initiatives to drive increased profitability.
Recently Issued Accounting Standards
See Note 1 to our unaudited consolidated financial statements included in this Quarterly Report for recently issued accounting standards, including the expected dates of adoption and expected impact to our consolidated financial statements upon adoption.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed in this Quarterly Report, including (without limitation) statements under "Management’s Discussion and Analysis of Financial Condition and Results of Operations" contain forward-looking statements. Although we believe that, in making any such statements, our expectations are based on reasonable assumptions, any such statement may be influenced by factors that could cause actual outcomes and results to be materially different from those projected.
These forward-looking statements include statements relating to our anticipated financial performance and business prospects, including debt reduction, currency values and financial impact and foreign exchange counterparty exposures, statements regarding our business strategy and other plans and objectives for our future operations, statements concerning the pending disposition of our global Dockers® business, including the expected timing of completion, statements concerning the impacts of macroeconomic conditions and tariffs, statements relating to the impact of pending legal proceedings, adequate liquidity levels, dividends, share repurchases or other capital deployment initiatives and/or statements preceded by, followed by or that include the words "believe", "will", "will be", "will continue", "will likely result", "may", "predicts", "so we can", "when", "anticipate", "intend", "estimate", "expect", "project", "aim", "could", "plans", "seeks" and similar expressions. These forward-looking statements speak only as of the date stated, and we do not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, even if experience or future events make it clear that any expected results expressed or implied by these forward-looking statements will not be realized. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these expectations may not prove to be correct or we may not achieve the financial results, savings or other benefits anticipated in the forward-looking statements. These forward-looking statements are necessarily estimates reflecting the best judgment of our senior management and involve a number of risks and uncertainties, some of which may be beyond our control. These risks and uncertainties, including those disclosed in Part I, Item 1A – Risk Factors of our Annual Report on Form 10-K for the fiscal year ended December 1, 2024, and in our other filings with the Securities and Exchange Commission, could cause actual results to differ materially from those suggested by the forward-looking statements and include, without limitation:
•changes in general economic and financial conditions, inflationary pressures, tariff regimes, including newly imposed U.S. tariffs and any additional responsive non-U.S. tariffs or additional U.S. tariffs, and the resulting impact on the level of discretionary consumer spending for apparel and pricing trend fluctuations, and our ability to plan for and respond to the impact of those changes;
•potential increases in import tariffs or taxes, impacts from already implemented or announced tariffs, including newly imposed U.S. tariffs and any additional responsive non-U.S. tariffs or additional U.S. tariffs, and the implementation of trade restrictions or sanctions;
•the Russia-Ukraine war, conflicts in the Middle East, and the potential impacts of these and other conflicts on global economic and geopolitical conditions;
•the risk of future non-cash asset impairment charges, including to goodwill, operating right-of-use assets and/or other store assets;
•our ability to execute on our business strategies, including our focus on elevating and strengthening our brand, the portion of our net revenues we aim to have represented by our direct-to-consumer business, our digital presence and growth into under-penetrated parts of our business, our expectations regarding gross and Adjusted EBIT margins, and our plans and expectations for the benefits of investments in operational excellence including steps to improve our speed-to-market;
•our ability to effectively manage any global productivity and outsourcing actions as planned, which are intended to increase productivity and efficiency in our global operations, take advantage of lower-cost service-delivery models in our distribution network and streamline our procurement practices to maximize efficiency in our global operations, without business disruption or mitigation to such disruptions;
•our ability to effectively manage our inventory and supply chain, the ability of business partners, including global third party logistics providers, to meet their obligations to us, and operational challenges faced by our warehouses and distribution centers;
•consequences of impacts to the businesses of our wholesale customers, including significant store closures or a significant decline in a wholesale customer’s financial condition leading to restructuring actions, bankruptcies, liquidations or other unfavorable events for our wholesale customers, caused by factors such as, among other things, inability to secure financing, decreased discretionary consumer spending, inconsistent foot and online traffic patterns and an increase in promotional activity as a result of decreased foot and online traffic, pricing fluctuations, general economic and financial conditions and changing consumer preferences;
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•our ability to execute on our commitment to increasing total shareholder returns through our capital allocation priorities;
•our ability to achieve anticipated operating model optimization, simplified processes and cost savings from our global productivity initiative;
•our and our wholesale customers’ decisions to modify strategies and adjust product mix and pricing, and our ability to manage any resulting product transition costs, including liquidating inventory or increasing promotional activity;
•our ability to purchase products through our independent contract manufacturers that are made with quality raw materials and our ability to mitigate the variability of costs related to manufacturing, sourcing, and raw materials supply and to manage consumer response to such mitigating actions;
•our ability to gauge and adapt to changing U.S. and international retail environments and fashion trends and changing consumer preferences in product, price-points, as well as in-store and digital shopping experiences;
•our ability to respond to price, innovation and other competitive pressures in the global apparel industry, on and from our key customers and in our key markets and to increasing consumer expectations;
•our ability to increase the number of dedicated stores for our products, including through opening and profitably operating company-operated stores;
•our future business expectations, products, strategies, and goals, including our future financial, strategic, and operating performance and our long-term goals and targets;
•the extent to which wholesale customer forward demand signals result in actual sales;
•consequences of inflation, foreign currency exchange and interest rate fluctuations;
•the impact of foreign currency and exchange counterparty exposures;
•the impact of the effects of global supply chain disruptions on our business;
•increases in the price or availability of raw materials;
•the impact on our consumer traffic and demand, our business operations and the operations of our suppliers and manufacturers as climate change evolves and the frequency and severity of weather events increase;
•the impact of seasonality of our sales and our business;
•our ability to successfully prevent or mitigate the impacts of data security breaches;
•our ability to attract and retain key executives and other key employees;
•our ability to achieve our diversity, equity and inclusion, ESG and sustainability and climate change goals;
•our ability to protect our trademarks and other intellectual property;
•the impact of the variables that affect the net periodic benefit cost and future funding requirements of our postretirement benefits and pension plans;
•our dependence on key distribution channels, customers and suppliers;
•our ability to utilize our tax credits and net operating loss carryforwards;
•potential future paydowns of existing debt;
•future acquisitions of or investments in new businesses, including the Beyond Yoga® integration;
•planned dispositions and their expected impact, including the pending sale of our global Dockers® business;
•the adequacy of our liquidity position;
•the process and risks relating to the implementation of a new ERP system;
•the impact of pending, ongoing or future legal proceedings, litigation matters and disputes and regulatory developments;
•the impact of future shareholder returns, including share repurchases and dividends;
•changes in or application of trade and tax laws and policies; and
•political, social and economic instability, or natural disasters, in countries where we or our customers do business.
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We have based the forward-looking statements contained in this Quarterly Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, business strategy and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions and other factors described under Part I, Item 1A – Risk Factors of our Annual Report on Form 10-K for the fiscal year ended December 1, 2024, in our other filings with the SEC and in this Quarterly Report. These risks are not exhaustive. Other sections of this Quarterly Report include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
The forward-looking statements made in this Quarterly Report relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this Quarterly Report or to conform such statements to actual results or revised expectations, except as required by law.
Additional information regarding factors that could cause results to differ can be found in our Annual Report on Form 10-K for the fiscal year ended December 1, 2024, in this Quarterly Report and our other filings with the U.S. Securities and Exchange Commission. We suggest that this document be read in conjunction with our other filings with the U.S. Securities and Exchange Commission.
As used herein, "Levi Strauss", "Levi", "Levi’s”, "the company", "the Company", "we", "us", "our" and similar terms include Levi Strauss & Co. and its subsidiaries, unless the context indicates otherwise.
| Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | ||||
There have been no material changes in our primary market risk exposures or how those exposures are managed from the information disclosed in our 2024 Annual Report on Form 10-K.
| Item 4. | CONTROLS AND PROCEDURES | ||||
Evaluation of Disclosure Controls and Procedures
We have evaluated, under the supervision and with the participation of management, including our chief executive officer and our chief financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act") as of August 31, 2025. Based on that evaluation, our chief executive officer and our chief financial officer concluded that as of August 31, 2025, our disclosure controls and procedures were effective at a reasonable assurance level.
Changes in Internal Control over Financial Reporting
We maintain a system of internal control over financial reporting that is designed to provide reasonable assurance that our books and records accurately reflect our transactions and that our established policies and procedures are followed. There were no changes to our internal control over financial reporting for the quarterly period ended August 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
| Item 1. | LEGAL PROCEEDINGS | ||||
In the ordinary course of business, we have various claims, complaints and pending cases, including contractual matters, facility and employee-related matters, distribution matters, product liability matters, intellectual property matters, bankruptcy preference matters and tax and administrative matters. We do not believe any of these pending claims, complaints and legal proceedings will have a material impact on our financial condition, results of operations or cash flows.
| Item 1A. | RISK FACTORS | ||||
For information regarding factors that could affect our results of operations, financial condition and liquidity, see the risk factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 1, 2024. There have been no material changes to our previously reported Risk Factors.
| Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | ||||
(a) Recent Sales of Unregistered Securities
None.
(b) Use of Proceeds from Securities
None.
(c) Purchases of Equity Securities by the Issuer and Affiliated Purchasers
| Period | Total number of shares purchased(1) | Average price paid per share(2) | Total number of shares purchased as part of publicly announced plans or programs(1) | Approximate maximum dollar value of shares that may yet be purchased under the plans or programs(1) | |||||||||||||||||||
| June 2, 2025 - July 6, 2025 | — | $ | — | — | $ | 560,436,556 | |||||||||||||||||
July 7, 2025 - August 3, 2025(2) | 4,989,605 | — | 4,989,605 | $ | 440,436,556 | ||||||||||||||||||
| August 4, 2025 - August 31, 2025 | — | — | — | $ | 440,436,556 | ||||||||||||||||||
| Total | 4,989,605 | $ | — | 4,989,605 | |||||||||||||||||||
_________
(1)We maintain a share repurchase program authorized by the Board. Under this program, we may repurchase shares from time to time. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions and alternate uses of capital. The share repurchase program may be effected through Rule 10b5-1 plans, open market purchases or privately negotiated transactions, each in compliance with Rule 10b-18 under the Exchange Act. The program may be suspended or discontinued at any time and does not have an expiration date. Share repurchase authority was $440.4 million as of October 2, 2025.
(2)During the third quarter of 2025, the Company entered into an accelerated share repurchase transaction with a third-party financial institution to repurchase an aggregate of $120.0 million of the Company’s Class A common stock as part of its share repurchase program. At inception, the Company made an initial payment of $120.0 million and received and immediately retired 4,989,605 shares of Class A common stock, representing 80% of the dollar amount of the transaction based on the August 1, 2025 closing share price, over the transaction’s term (the “ASR Agreement”). The total number of shares the Company will ultimately repurchase and the average price per share under the ASR Agreement will be based on the average of the daily volume-weighted average prices of our common stock during the term of the ASR Agreement, less a discount, pursuant to the terms and conditions of the ASR Agreement, and is expected to occur no later than the first quarter of 2026.
Shares withheld related to the vesting or exercise of stock-based compensation awards are excluded from the disclosure.
| Item 3. | DEFAULTS UPON SENIOR SECURITIES | ||||
None.
| Item 4. | MINE SAFETY DISCLOSURES | ||||
Not applicable.
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Item 5. | OTHER INFORMATION | ||||
During the third quarter ended August 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) adopted terminated
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| Item 6. | EXHIBITS | ||||
| Incorporated by Reference | ||||||||||||||||||||||||||||||||
| Exhibit Number | Description of Document | Form | SEC File No. | Exhibit | Filing Date | |||||||||||||||||||||||||||
| 3.1 | Amended and Restated Certificate of Incorporation of the Registrant. | 8-K | 001-06631 | 3.1 | 3/25/2019 | |||||||||||||||||||||||||||
| 3.2 | Amended and Restated Bylaws. | 8-K | 001-06631 | 3.1 | 4/21/2023 | |||||||||||||||||||||||||||
| 4.1 | Indenture, dated as of July 29, 2025, by and between Levi Strauss & Co. and Computershare Trust Company, N.A., as Trustee (including form of 4.000% Senior Note due 2030). | 8-K | 001-06631 | 4.1 | 7/29/2025 | |||||||||||||||||||||||||||
| 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith. | |||||||||||||||||||||||||||||||
| 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith. | |||||||||||||||||||||||||||||||
| 32.1† | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith. | |||||||||||||||||||||||||||||||
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. Filed herewith. | |||||||||||||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. Filed herewith. | |||||||||||||||||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. Filed herewith. | |||||||||||||||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. Filed herewith. | |||||||||||||||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. Filed herewith. | |||||||||||||||||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. Filed herewith. | |||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained within Exhibit 101). Filed herewith. | |||||||||||||||||||||||||||||||
† The certification attached as Exhibit 32.1 accompanies this Quarterly Report on Form 10-Q, is not deemed filed with the Commission and is not to be incorporated by reference into any filing of Levi Strauss & Co. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: | October 9, 2025 | LEVI STRAUSS & CO. | |||||||||
| (Registrant) | |||||||||||
| By: | /s/ TIMOTHY J. DAVIS | ||||||||||
Timothy J. Davis Senior Vice President and Global Controller | |||||||||||
| (Principal Accounting Officer and Duly Authorized Officer) | |||||||||||
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Levi Strauss & Co.
NYSE:LEVI
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Apparel Manufacturing
Apparel & Other Finishd Prods of Fabrics & Similar Matl
United States
SAN FRANCISCO