Levi Strauss tops Q3 estimates but stock unravels as tariffs weigh on margin outlook
Levi’s fell about 9% Friday morning after the denim giant topped Q3 estimates but warned of margin pressure tied to tariffs.
The company posted adjusted earnings per share of $0.34, above Wall Street’s forecast of $0.31, while revenue rose 7% to $1.54 billion, also beating expectations. Levi’s raised its full-year EPS outlook to $1.27 to $1.32, up slightly from prior guidance, and now expects revenue growth of roughly 3%, up from 1% to 2%.
Still, after a big run-up this year, investors appear to be letting some air out of the rally. The company cautioned that new US tariffs on goods from South Asia, including Bangladesh, Cambodia, and Pakistan, could hit fourth-quarter gross margins by about 130 basis points.
Elsewhere, JPMorgan lifted its price target on Levi’s to $33 from $23 and maintained an “overweight” rating, citing higher average purchase values and growing popularity among younger shoppers.
Even with the today’s earnings dip, Levi shares are still up about 29% this year.
