Levi Strauss & Co.: 2Q26 Review: Continued Strength Across Channels and Regions

研报英文原文证据摘录

Levi Strauss & Co.: 2Q26 Review: Continued Strength Across Channels and Regions

es to benefit from its multi-year ERP transformation and 52 Week range USD 25.58-17.72

distribution network optimization initiatives expected to be completed by mid-2027, which

should provide a meaningful earnings lever. With management once again raising FY26 revenue

and EPS guidance, we continue to view LEVI as a long-term compounder with a clear path

toward approximately $10bn of revenue and ~15% EBIT margins over time. As such, we reiterate

our OW rating as: 1) LEVI executes on an algorithm of +MSD top-line growth coupled with EBIT

margin expansion, 2) the company continues to exhibit disciplined inventory management, 3)

EPS is supported by ongoing capital returns including a $200mn ASR and dividend growth, and

Source: IDC

4) LEVI is successfully expanding its TAM beyond core denim, with increasing contribution from Link to Barclays Live for interactive charting

women's, tops, active, and lifestyle categories. Following the earnings call on 7/8/26, LEVI

shares traded in the aftermarket -5.9% vs. the S&P500 trading flat, likely due to optimism into

U.S. Specialty Retail, Apparel &

the print. Footwear

Adrienne Yih

Tariff Exposure Update. 2Q26 GM expanded +10bps despite tariffs and unfavorable FX, offset

+1 212 526 5257

by lower product costs and pricing actions. Tariffs were cited as the primary driver behind a adrienne.yih@barclays.com

-40bps decline in U.S. segment OM, partially offset by the favorable impact of cost initiatives and BCI, US

pricing actions. FY26 guidance assumes a 30% incremental U.S. tariff rate on China, and the rest

Michael Vu

of the world at 20%. Management cited there could be upside to numbers if tariff rates prove

+1 212 526 9568

michael.vu@barclays.com