A：The consistent execution of Levi Strauss and Company's strategic priorities was attributed to strong sales and profitability in the direct-to-consumer channel, solid global wholesale performance, and robust core and focus area results. The company's pivot to become a DTC-first head-to-toe denim lifestyle retailer was emphasized.

A：Levi Strauss and Company reported a fourth consecutive quarter of high single-digit organic revenue growth. The revenue growth was broad-based across all business segments including DTC and wholesale, international, and domestic. The CEO highlighted strong sales and profitability in the direct-to-consumer channel, solid performance in global wholesale, and robust core business with significant growth in focus areas like women's and tops. The company also raised full-year revenue and EPS guidance. Looking ahead, the company plans to continue building on its strategies through impactful marketing campaigns, strategic partnerships, and product pipeline innovation.

A：Several factors indicate that Levi Strauss and Company's momentum will continue: the effectiveness of its narrow focus in maximizing the potential of the Levi brand, the large and growing total addressable market for denim, leadership in denim positioning the company for success, the success of the DTC-first strategy, and continued growth opportunities in international markets, particularly in Asia.

A：Highlights from the third quarter include strong performance across the Levi brand's strategies, such as successful campaigns with Beyonce and Shibuichi, innovative collaborations with Nike and Toy Story, and the evolution towards a head-to-toe denim lifestyle retailer. The quarter saw strong growth in the bottoms business, revival in low rise styles, and the introduction of new fits and fabrics, as well as a well-positioned merchandise assortment and marketing campaign for the holiday season.

A：Levi Strauss and Company's global direct to consumer sales were up 9%, driven by higher sales across all channels. Productivity initiatives resulted in more than 400 basis points of margin expansion in the quarter, and strong results from store optimization efforts improved both the consumer experience and store productivity.

A：The momentum in the denim category is accelerating both in the U.S. and globally, and as the market leader, the company is well-positioned to take advantage of this. The company has been gaining market share in youth premium and with its signature business.

A：The company holds the number one market share position in the U.S. and globally for both men's and women's denim.

A：The recent market share gains are attributed to product innovation and newness across fits, fabrics, and silhouettes, including strength across various categories like top, and the company is expanding its addressable market from just denim bottoms to a full head-to-toe denim lifestyle.

A：The consumer continues to be resilient and responds positively to the company's strategies and products, as evidenced by a fourth consecutive quarter of high single-digit organic growth and broad-based strength across geographies and product categories.

A：The company is building its future on expanding beyond just denim to a full denim lifestyle. It focuses on a variety of consumer cohorts and operates with a strong presence in the U.S., especially during times of uncertainty when consumers turn to trusted brands like Levi's.

A：The company expects to maintain health and momentum in the business through the fourth quarter, driven by robust holiday planning and a lifestyle assortment of products that are seasonally relevant. The company is also anticipated to continue leveraging marketing campaigns to connect with consumers during the holiday season.

A：Gross margin grew by 110 basis points higher than expected, attributed to three factors: a more favorable structure mix with higher women's DTC and international sales, moderate pricing driving higher full-price sales, and an FX benefit. The distribution line is currently running at the end of sales, and while it is below 50% in the current period, it is expected that gross profit dollars will continue to grow at a faster pace than sales.

A：The company is transforming its distribution network to a hybrid model built for omnichannel, from a manual network that was built for wholesale. This is expected to lead to cost reductions and improved efficiency over time.

A：Distribution costs have increased by 7%, with about half of the increase due to reclassifying expenses from selling to distribution for e-commerce and the other half from volume growth and the cost of running two distribution centers in parallel. The company expects to ramp down the parallel running of the distribution centers by the end of the first quarter in 2026.

A：The company expects the EBIT margin to end the year in the mid-levels, representing growth over the last couple of years.

A：The company's strategy to achieve gross margin expansion includes continued structural improvements and aims for a five-year gross margin expansion of 200 basis points. They also plan to reinvest a portion of their budget in advertising to strengthen the brand and drive revenue, which is expected to present a 50 basis point headwind.

A：Growth in the wholesale business was driven by existing accounts, with consumers responding positively to the company's fashion fits, especially in women's wear. New accounts and partnerships such as Western wear and Cavenders also contributed. Inventory management is being simplified with SKU rationalization to align with initiatives and partnership strategies.

A：The company is optimistic about maintaining healthy business growth in the Americas, with the expectation of positive results in Q4. They plan to sustain growth by continuing to focus on DTC channels, driving units per transaction, conversion, and full-price sell-through. However, there is a recognition of the challenging macro environment and the need to be prudent when projecting results.

A：The company has made significant progress in rationalizing SKUs by reducing them by about 15% compared to last year. This ongoing effort over the past 18 months has been enabled by a tighter globally common or globally directed assortment perspective, resulting in 40% of SKUs being globally common in the second half of 2025, up from under 10% a couple of years ago. This has led to a 20% increase in SKU productivity and indicates the team is operating more like a retailer, driving tailwinds in the business, especially in DTC.

A：The company is looking at pricing opportunities both in the U.S. and globally, with an eye on structural improvements in DTC and international divisions. The focus is on full price selling, which is not yet at 100%, suggesting there is clear opportunity for pricing actions. Additionally, they are examining product costs by simplifying the SKU portfolio, considering a shorter go-to-market calendar, and benefiting from a more favorable position of commodity markets compared to a year ago. Commitments have been made for product costing in the first half of the upcoming year, with an expectation to largely offset impacts from tariffs.

A：The company is seeing strength across channels and gender in the tops business, with a 9% overall growth for the quarter and a 10% year-to-date increase. Newness and core offerings in tops are contributing to the growth. The strategy for bottoms is to reduce the ratio from the current 3:1 to the goal of 1:1, which is in line with the company's mission to provide a head-to-toe denim lifestyle. As the company drives top sales, it expects to see an uptick in traffic and support the overall mission.

A：Pricing actions taken in Q3 did not result in any negative impact on demand from customers or consumers. The company has been focusing on full price selling, which has helped maintain momentum. New products have also been performing well. In terms of future pricing strategies, the company is considering focusing on the price-value equation and segmentation of products to cater to different consumer segments, both in the U.S. and globally.

A：Sell-in prices to partners have been consistent with sell-out results, indicating no hesitancy from partners to buy at higher prices. This consistency suggests that the company is optimistic about ending the year strongly and maintaining momentum into the next quarter.