Levi Strauss lifts profit outlook as US tariff refunds boost third-quarter margins

Levi Strauss & Co., the world's best-known denim brand, reported on 7 October that net revenues rose 4% to $1.6 billion in its third quarter ended 30 August 2026, or 5% on an organic basis, and raised its profit outlook for the year.

Growth came mainly from outside the United States. Revenue in Europe rose 4% to $442 million (5% organic) and in Asia 5% to $293 million (10% organic). The Americas grew 4% to $839 million, but sales in the US alone were down 1% on a reported basis, the company said.

Gross margin jumped 450 basis points to 66.2%. Refunds of tariffs contributed 490 basis points, of which the company said about 120 basis points were reinvested in the business. In its quarterly filing with the US Securities and Exchange Commission, Levi's said it recorded about $78.6 million of refunds of previously paid IEEPA tariffs in the quarter, after a US Supreme Court ruling on 20 February 2026 invalidated those duties. US Customs began processing refunds in phases in April.

The company now expects full-year adjusted diluted earnings per share of $1.54 to $1.56, up from $1.46 to $1.52, and organic revenue growth of about 6%. "Our third-quarter performance highlighted the power of our diversified portfolio," chief executive Michelle Gass said.

What it means for Egyptian exporters

Levi's is one of the largest denim buyers in the world, and its results show where demand is growing: Europe and Asia, while the US is flat. For Egypt's expanding denim and jeans makers, that supports a focus on European programmes, where Egypt's proximity is an advantage. The tariff-refund boost is a one-off, so brands will keep pressing suppliers on cost; Egyptian mills that offer integrated fabric-to-garment supply and quick turnaround are best placed in that conversation.