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Levi Strauss Stock Falls as Weak Guidance Eclipses Q2 Earnings Beat
Shares of Levi Strauss & Co. (NYSE: LEVI) fell sharply in pre-market trading, dropping nearly 5.8% to $22.96 after the company's forward-looking guidance overshadowed a strong fiscal second-quarter earnings report. The decline reflects investor concern over a potential slowdown in growth for the second half of the year.
Guidance Overshadows Strong Quarter
The denim apparel maker reported fiscal Q2 2026 results that beat analyst expectations. The company posted adjusted earnings of $0.28 per share on revenue of $1.56 billion, exceeding consensus estimates of $0.24 per share and $1.52 billion in revenue, respectively.
However, the positive results were eclipsed by the company's outlook. Management guided for third-quarter revenue growth of just 4%–5%, a significant deceleration from the 8% growth reported in the second quarter. Furthermore, the full-year adjusted EPS guidance of $1.46–$1.52 has a midpoint of $1.49, slightly below the analyst consensus of $1.51.
Market Headwinds and Tariff Concerns
Investor anxiety was compounded by external factors, including broader market weakness and trade policy uncertainty. According to CFO Harmit Singh, the fluid nature of trade policy made it difficult for the company to fully incorporate potential tariff impacts into its financial outlook.
AdThe sell-off occurred against a mildly risk-off market backdrop, amplifying pressure on consumer discretionary stocks. The stock's decline from near its 52-week high of $25.58 suggests investors are recalibrating their growth expectations for the remainder of the fiscal year.
Underlying Business Momentum
Despite the muted forecast, Levi's report highlighted several areas of operational strength. These positive developments were not enough to outweigh the weaker guidance in early trading.
Key underlying business highlights included:
- Direct-to-consumer sales surpassed 50% of total revenue for the first time.
- Women's apparel sales grew by 11%.
- The company announced a 14% increase in its quarterly dividend.