Levi’s up 8% on Strong Earnings Despite Big Profit Hit From Tariffs

Levi Strauss had a good second quarter, even with tariffs setting in.

On Thursday, the jeans brand reported a 6% increase in net revenues in the latest quarter compared to the year before, with sales of $1.4 billion.

Its bright spot, in particular, was Europe, which saw a 14% increase in net sales compared to the year before. The company’s stock was up about 6% in after-hours trading on Thursday.

Michelle Gass, the company’s CEO, said in Thursday’s earnings call that Levi’s sold its Dockers brand, launched phase three of its Beyoncé campaign, and expanded its tops and outerwear lines last quarter.

Levi’s strong performance came as President Donald Trump’s tariffs took effect in the latest quarter. Finance chief Harmit Singh said in the call that he estimated a $25 to $30 million profit hit from the tariffs for the rest of the year.

“We are competitively positioned, better than most, as it relates to tariffs. Number one, 60% of our business is international now,” Gass told CNBC in a post-earnings interview on Thursday.

“But our exposure to China is really minimal. And then I would say the team is doing a great job across multiple levers to mitigate,” Gass added to CNBC.

Related stories

Gass said in an earnings call in April that Levi’s has manufacturers in 28 countries, 20 of which supply products to the US.

This month, President Donald Trump announced a slew of tariffs for trading partners, including a 50% tariff on goods from Brazil and a 20% tariff rate for goods from Vietnam.

Gass said on the April earnings call that the tariff situation was “fluid,” and the brand would be judicious in deciding pricing changes.

“As we look at pricing, we do believe that the brand, especially given the health of the brand, that there is pricing power there,” she said to investors. “But if we do anything, it will be very surgical.”

Representatives for Levi did not respond to a request for comment from Business Insider.