Levi’s Stock Plunge: 8% Drop Defies Strong Q3 Revenue Growth and Raised Full-Year Outlook

Wall Street delivers another head-scratcher as Levi Strauss shares tumble despite beating expectations.

The Denim Dilemma

Levi's third-quarter performance should have investors cheering - revenue surged past projections and management actually raised their full-year guidance. Yet the market responded with an 8% haircut, proving once again that Wall Street logic operates on its own mysterious wavelength.

Numbers Don't Lie, But Traders Do

The company posted impressive growth metrics that typically trigger buying frenzies. Strong consumer demand, expanding margins, and upward-revised forecasts created what should have been a perfect bullish storm. Instead, traders found reasons to sell - because when fundamentals and stock performance diverge, someone's reading different financial statements.

Fashion Forward, Market Backward

While Levi's continues stitching together solid operational results, the market seems preoccupied with next season's trends rather than current performance. The disconnect highlights how quarterly earnings have become less about actual results and more about beating artificially manufactured expectations.

Another case of great company, questionable stock movement - because why reward actual performance when you can panic over whispers and speculation?

TLDR

• Levi Strauss stock trades at $22.46, down 8.43% after Q3 results.
• Company reports high single-digit revenue growth for the fourth straight quarter.
• Direct-to-consumer sales up 9%; e-commerce up 16%.
• Gross margin expanded by 110 basis points to 61.7%.
• Full-year revenue and EPS guidance raised despite tariff and cost headwinds.

Levi Strauss & Co. (NYSE: LEVI) shares traded at $22.46, down 8.43% in early trading on October 10, 2025, even as the company delivered another quarter of strong performance.

Levi Strauss & Co. (LEVI)

The jeans and apparel giant posted high single-digit organic revenue growth for the fourth consecutive quarter and raised its full-year revenue and earnings outlook.

For the quarter, adjusted diluted EPS stood at $0.34, while gross margin expanded by 110 basis points to 61.7%, reflecting effective pricing and strong execution.

Levi Strauss & Co., $LEVI, Q3-25. Results:

📊 Adj. EPS: $0.34 🟢
💰 Revenue: $1.54B 🟢
📈 Net Income: $122M
🔎 Strong momentum from its DTC pivot drove record margins and raised full-year guidance. pic.twitter.com/54040yVSDm

— EarningsTime (@Earnings_Time) October 9, 2025

Consistent Growth Across Key Markets

Levi’s global momentum continued through Q3, with direct-to-consumer (DTC) sales up 9%, supported by a 16% increase in e-commerce. The DTC-first approach improved profitability and boosted store productivity across markets.

In the U.S., revenue grew 3%, while international business surged 9%, led by Asia’s accelerating demand. Markets such as India, Japan, Korea, and Turkey recorded double-digit growth.

The company’s women’s business remained a bright spot, up 9% in the third quarter and 12% year-to-date, driven by new collections and successful marketing campaigns.

Strategic Initiatives and Shareholder Returns

Levi Strauss declared a $0.14 dividend per share, up 8% year-over-year, underscoring its commitment to shareholder value. The company returned $151 million to shareholders during the quarter, a 118% increase compared to the previous year.

The company continues to invest in its DTC channel and product innovation to strengthen brand equity and expand its global presence.

Challenges: Tariffs and Distribution Costs Weigh on Margins

Despite the positive results, Levi Strauss faces challenges. Higher tariffs are projected to reduce full-year gross margins by 70 basis points. The company also cited higher distribution costs tied to transitioning to a new distribution network, impacting near-term profitability.

The U.S. wholesale business is expected to decline in the fourth quarter due to last year’s strong comparison and the absence of a 53rd week. Meanwhile, Europe saw weaker foot traffic in June and July due to unfavorable weather conditions.

Financial and Market Performance

Levi Strauss remains a strong long-term performer, with its year-to-date return at 31.46%, outperforming the S&P 500’s 14.74%. Over the past three years, the stock gained 69.85%, while its five-year return stands at 64.15%.

Despite short-term headwinds, Levi’s consistent revenue expansion, growing DTC presence, and margin resilience underline its strategic strength in the global apparel market.

Levi Strauss & Co. reported its Q3 2025 earnings on October 10, 2025. Investors will closely watch Q4 performance as the company navigates tariff pressures and evolving consumer demand.