Levi Strauss & Co. (LEVI) Financials

Levi Strauss & Co. (NYSE:LEVI) is showing improving financial momentum, although results remain seasonal and include several restated prior-period figures. In Q2 2026, revenue increased 8.0% year over year to $1.56 billion, while gross profit rose 8.1% to $979.1 million. Gross margin improved modestly to approximately 62.7% from 62.2% in Q2 2025. Operating income grew 13.1% to $122.2 million, and diluted earnings per share increased to $0.22 from $0.17.

Cash generation has also strengthened. Q2 2026 operating cash flow was $270.8 million, up from $185.5 million in the prior-year quarter. After $39.9 million of capital expenditures, approximate free cash flow was $230.9 million. On the balance sheet, cash and short-term investments totaled $977.8 million, compared with $736.7 million a year earlier, while long-term debt was relatively stable at $1.04 billion.

Looking across the available periods, Levi’s liquidity and equity position have generally improved from 2023 levels. Cash increased from $294.5 million in Q3 2023 to $849.3 million in Q2 2026, and total common equity rose from $1.94 billion to $2.27 billion. However, operating performance has been uneven by quarter. The company has reported recurring restructuring charges, and Q2 2026 revenue and operating income were lower than Q1 2026 on a seasonal basis. Investors should also account for restatements in several 2024 and 2025 comparisons and unusual discontinued-operations items in reported net income.

• Revenue growth has returned: Q2 2026 revenue rose 8.0% year over year, following 14.1% growth in Q1 2026 versus the restated Q1 2025 period.
• Profitability is recovering: Q2 operating income increased to $122.2 million from $108.0 million, and the operating margin improved to approximately 7.8% from 7.5%. This is a significant recovery from the much weaker Q3 2024 margin, which was affected by a $111.4 million impairment charge.
• Strong operating cash flow: Q2 2026 operating cash flow of $270.8 million was approximately 46% above the prior-year quarter, providing support for dividends, investment and debt management.
• Improved free cash flow: Approximate Q2 2026 free cash flow was $230.9 million after capital expenditures, compared with roughly $146.0 million in Q2 2025.
• Liquidity has strengthened: Cash and short-term investments rose to $977.8 million in Q2 2026 from $736.7 million in Q2 2025. The current ratio also improved to approximately 1.60 from 1.48.
• Working capital trends are favorable: Q2 2026 inventory declined approximately 7.3% year over year to $1.16 billion, while accounts receivable fell about 5.1%. Lower inventory and receivables can reduce pressure on cash flow if sales remain stable.
• Shareholder returns remain supported: Levi continued paying a $0.14 quarterly dividend in Q1 and Q2 2026, and recent cash flow has been sufficient to cover dividend payments and moderate debt repayments.
• Debt is manageable but not negligible: Long-term debt was $1.04 billion in Q2 2026, roughly unchanged from a year earlier. Net debt after cash and short-term investments was only about $65 million, but interest expense remains a recurring cost.
• Results remain seasonal and volatile: Q2 revenue of $1.56 billion was lower than Q1 revenue of $1.74 billion, while operating income fell from $198.7 million to $122.2 million. Quarterly comparisons may therefore be less meaningful than year-over-year trends.
• Restructuring continues: Levi recorded $13.5 million of restructuring charges in Q2 2026, following $7.9 million in Q1 and additional charges in earlier periods. Continued restructuring may weigh on reported earnings and suggests that cost optimization efforts are not yet complete.