Levi Strauss & Co.: Bullish tone at management meetings; Maintain Buy

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Levi Strauss & Co.: Bullish tone at management meetings; Maintain Buy

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Levi Strauss & Co.

Bullish tone at management meetings;

Maintain Buy

Maintain Rating: BUY | PO: 27.00 USD | Price: 23.84 USD

6 key questions and answers that increase our confidence 10 July 2026

We maintain Buy; at 14x 27E P/E, we see a compelling opportunity to own a brand still in Equity

early stages of a transition to higher-quality, consistent growth. We see EPS/valuation

upside supported by continued sales momentum and opportunities for stronger flow- Kendall Toscano Research Analyst

through. Post 2Q EPS (see our 2Q recap), we hosted Michelle Gass (CEO), Harmit Singh BofAS

(CFO), and Aida Orphan (IR) for virtual investor meetings. Key Q&A included: +1kendall.toscano@bofa.com646 855 1704

1) Are Europe concerns overblown? Despite the slight 2Q miss, underlying Europe Lorraine Hutchinson, CFA Research Analyst

demand remains healthy and was unchanged vs. 1Q excluding the wholesale timing shift. BofAS

DTC grew 7% and 2H pre-books are +HSD% as partners respond to newer offerings +1lorraine.hutchinson@bofa.com646 855 0951

(incl. tops & lightweight denim), supporting confidence in MSD% annual growth. Trevor Tompkins

Research Analyst

2) Why should investors have conviction on the 4Q margin ramp? The outlook for BofAS

4Q margin expansion is underpinned by several identifiable drivers incl. lower FX +1trevor.tompkins@bofa.com646 855 0343

pressure, lapping tariffs, lower marketing costs, and benefits from the US DC transition.

3) Why were benefits from US DC transition delayed, and why is 4Q timing

more certain? LEVI chose to maintain parallel facilities longer to protect service levels Stock Data

amidst strong demand. The remaining legacy DC now has a closure notice in place and