Denim clothing company Levi's (NYSE: LEVI) met Wall Street’s revenue expectations in Q3 2026, with sales up 4.3% year on year to $1.61 billion. Its non-GAAP profit of $0.48 per share was 34% above analysts’ consensus estimates.

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“Our third-quarter performance highlighted the power of our diversified portfolio and reinforced our confidence that we have the right strategies in place,” said Michelle Gass, President and CEO of Levi Strauss & Co. “We saw strong growth in our international and wholesale businesses, and continued momentum across our lifestyle categories. While our direct-to-consumer business fell short of our internal expectations, we moved quickly to address the shortfall and are encouraged by the strength we are seeing heading into the holiday season, including in the U.S. Based on the acceleration in recent trends, our DTC business is on track to deliver mid-single-digit growth in the fourth quarter.”

Company Overview

Credited for inventing the first pair of blue jeans in 1873, Levi's (NYSE: LEVI) is an apparel company renowned for its iconic denim products and classic American style.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Regrettably, Levi’s sales grew at a weak 4.1% compounded annual growth rate over the last five years. This was below our standard for the consumer discretionary sector and is a tough starting point for our analysis.

Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Levi’s annualized revenue growth of 6.2% over the last two years is above its five-year trend, which is encouraging.

We can better understand the company’s sales dynamics by analyzing its constant currency revenue, which excludes currency movements that are outside their control and not indicative of demand. Over the last two years, its constant currency sales averaged 7.3% year-on-year growth. Because this number aligns with its reported revenue growth, we can see that foreign exchange has not had a meaningful impact on topline.

This quarter, Levi's grew its revenue by 4.3% year on year, and its $1.61 billion of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 4.5% over the next 12 months, a slight deceleration versus the last two years. This projection doesn’t excite us and implies its products and services will face some demand challenges.

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Operating Margin

Levi’s operating margin has generally stayed the same over the last 12 months, and we generally like to see margin increases due to economies of scale and cost efficiency over time.

In Q3, Levi's generated an operating margin profit margin of 13.8%, up 3 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

Levi’s weak 4.9% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

In Q3, Levi's reported adjusted EPS of $0.48, up from $0.34 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Levi’s full-year EPS to grow 3.6% from $1.59 to $1.65.

Key Takeaways from Levi’s Q3 Results

It was good to see Levi's beat analysts’ EPS expectations this quarter. We were also excited its adjusted operating income outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this quarter featured some important positives. The stock remained flat at $19.43 immediately following the results.

So should you invest in Levi's right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).