Levi Strauss Q3 2026: Tariff Refund Fuels Big EPS Beat and Raised Guidance
As seen on the 24/7 Wall St. homepage on October 7, 2026.
A $79 million tariff refund drove 450 basis points of gross margin expansion, and management raised full-year adjusted EPS guidance to $1.54 to $1.56. A $100 million accelerated buyback and a 14% bigger dividend come with it, with revenue missing expectations.
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A $79 million IEEPA tariff refund was the quarter's defining catalyst, pushing gross margin to 66.2%. Management reinvested roughly $25 million of those gains into promotional and marketing spending rather than let it all flow to the bottom line.
Adjusted diluted EPS of $0.48 cleared the $0.36 consensus estimate, extending Levi Strauss's streak of beating EPS expectations to five consecutive quarters. Revenue of $1.61 billion rose 4.3% year over year while missing expectations, with direct-to-consumer comparable sales essentially flat.
Outside the U.S., Asia posted 10% organic growth, e-commerce climbed 10%, and wholesale grew 6% across segments. Smaller brands also contributed, with Levi Strauss Signature up 12.2% and Beyond Yoga up 9.1%.
Management raised full-year adjusted diluted EPS guidance to $1.54 to $1.56, up from a prior range of $1.46 to $1.52. The updated outlook assumes current tariff rates remain in effect and embeds approximately $60 million of tariff refund redeployment across the full year.
The company announced a $100 million accelerated share repurchase program and a quarterly dividend of $0.16 per share, a 14% increase over the prior year. CEO Michelle Gass pointed to accelerating DTC trends heading into the holiday season, saying the segment is on track to deliver mid-single-digit growth in Q4.
Mentioned: LEVI