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Levi Strauss upped its full-year guidance in its Q2 earnings report, an optimistic signal for investors worried that US clothing retailers in particular are being harmed by President Trump’s volatile trade policies.
The denim maker reported net revenues of $1.4 billion, up 6% from the same time last year. Net income for the quarter came in at $67 million, a significant jump from $18 million the same quarter last year.
On the back of a solid report, Levi’s raised its full-year revenue guidance, expecting sales to climb between 1% and 2%, an improvement from its former guidance of a 1% to 2% decline. It’s also significantly better than the downward 5.2% forecast by analysts, per LSEG.
But this is 2025, and before Levi’s CFO Harmit Singh shared the company’s guidance on an earnings call, he went out of his way to address tariffs, noting that Levi’s guidance “assumes an additional 30% tariff on goods arriving in the US from China and an additional 10% tariff on US imports from the rest of the world.”
While the retailer doesn’t share its primary manufacturing hubs, Singh told CNBC the majority of its supply comes from Southeast Asia, including Pakistan, Bangladesh, and Indonesia, and Trump has recently threatened Bangladesh and Indonesia with higher tariffs.
With its current mitigation strategies in place, including supply chain diversification and vendor negotiations, the company expects tariffs to impact the business for the remainder of the year by 2 or 3 cents per share, or $25 to $30 million.
“We are doing our part. We are absorbing some of the costs. What helps is that our business is so strong,” Levi’s CEO Michelle Gass told CNBC. “We have been pulling back on promotions anyway, that’s leading to more full-price selling, and some of our new innovation, our new fits, we’re pricing at a premium, and they’re buying. So all of those things help us navigate this time of having the tariff headwind.”