Levi Strauss & Co. LEVI is leveraging its global denim leadership to develop a broader, direct-to-consumer-led lifestyle business spanning tops, dresses, shorts, non-denim bottoms and premium apparel. By offering complete outfits, the company can reach more women, address additional wearing occasions and expand its market opportunity while reducing its dependence on traditional jeans sales.
The strategy is gaining traction. Categories beyond denim bottoms contributed roughly one-third of the company’s top-line growth in the second quarter of fiscal 2026. Tops sales increased 5% or 7% excluding the European distribution-center impact, while shorts advanced 11%. The results demonstrate growing consumer acceptance of Levi’s expanded head-to-toe assortment.
Women’s apparel remains a particularly important growth avenue. Women’s revenues rose 11% during the quarter and accounted for 41% of first-half revenues, up from 39% in the prior-year period. Meanwhile, products other than denim bottoms represented 38% of first-half sales, highlighting Levi’s progress toward a more diversified category and customer mix.
The company’s expanding direct-to-consumer (DTC) platform provides additional support. Second-quarter revenues climbed 8% to $1.56 billion, including 6% organic growth. DTC organic revenues increased 8% and represented 51% of quarterly sales, while e-commerce advanced 17%. Greater DTC penetration strengthens Levi’s control over product assortments, merchandising, customer relationships and full-price selling.
Reflecting this momentum, management raised its fiscal 2026 reported revenue-growth outlook to 7-7.5% and adjusted EPS guidance to $1.46-$1.52. Risks remain, as tops generally carry lower gross margins than bottoms and broader assortments require disciplined inventory management. Nonetheless, continued strength across women’s, tops and DTC could establish lifestyle categories as a meaningful and durable growth engine.
LEVI’s Price Performance, Valuation & Estimates
Shares of Levi Strauss have gained 6.2% over the past six months period against the industry’s 12.4% decline.
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From a valuation standpoint, LEVI trades at a trailing price-to-sales ratio of 1.17, below the industry’s average of 1.29. It has a Value Score of A.
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The Zacks Consensus Estimate for Levi Strauss’ fiscal 2026 earnings implies year-over-year growth of 14.9%, while the same for fiscal 2027 indicates an uptick of 11.3%. Estimates for fiscal 2026 and 2027 have remained unchanged over the past 60 days.
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Levi Strauss currently carries a Zacks Rank #3 (Hold).
Key Picks
FIGS, Inc. FIGS is an apparel company focused on the healthcare industry. Its offerings include lab coats, jackets, footwear, bags, socks and other accessories used by healthcare professionals. The company carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for FIGS’ current financial-year earnings and sales suggests growth of 89.5% and 19.7%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 201.8%.
Boot Barn Holdings, Inc. BOOT is the largest lifestyle retailer in the United States, specializing in western and work-related footwear, apparel and accessories. The company also holds a Zacks Rank #2 at present.
The Zacks Consensus Estimate for Boot Barn’s current fiscal-year earnings and sales suggests growth of 22.6% and 15.7%, respectively, from the year-ago actuals. BOOT delivered a trailing four-quarter average earnings surprise of 11.4%.
Fossil Group, Inc. FOSL is involved in designing, marketing and distributing consumer fashion accessories. It also carries a Zacks Rank #2.
The Zacks Consensus Estimate for Fossil Group’s current fiscal-year earnings suggests growth of 96.7% from the year-ago actuals. FOSL delivered a trailing four-quarter average negative earnings surprise of 236.2%.
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Levi Strauss & Co. (LEVI): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).