A：Levi Strauss reported another strong quarter with record revenues across the top and bottom line, attributed to the strength of its business model, iconic brand, and growth across markets, channels, categories, and consumer demographics. The quarter's performance reflects strategic choices to focus and unlock the potential of the Levi's brand, resulting in consistent and fast growth, expanding addressable market, and improved profitability.

A：The global market for denim is expected to grow mid single digits annually through 2030, presenting a structural tailwind as the category outpaces historical growth. Levi Strauss is the global market share leader in denim and is well-positioned to capture this growth through innovation in fits and fabrics. The company's focus on core fits and newness in silhouettes like loose styles and baggy franchises is contributing to its leadership position.

A：Levi Strauss's Direct to Consumer (DTC) business, which comprised 51% of total company revenue in the quarter, grew by 8% and showed strength with comparable sales up 6%. This highlights the success of the company's efforts to become a best-in-class DTC-first retailer, driven by improved site experiences and elevated online assortment, resulting in solid e-commerce performance.

A：Levi Strauss's international revenue grew led by double-digit gains in Asia and Latin America. Notably, the company celebrated 125 years of the Levi's brand in Mexico, its second-largest market globally, and a key contributor to international performance. Performance was strong across various international markets with Q2 growth led by Turkey, Japan, and India, and a return to growth in China supported by new leadership and improved execution.

A：The company's strategic focus has sharpened, the Levi's brand has been elevated, and execution has improved, leading to a stronger and more durable business.

A：The company's Q2 performance was a result of exceeding expectations on both the top and bottom lines, expanding margins, strong EPS growth, and generating significantly stronger free cash flow.

A：The company has migrated key brands onto its new global ERP platform, enabling faster decision-making and supporting its DDC-first model while laying the foundation to scale AI and automation globally.

A：Q2 net revenues increased 8% reported and 6% organic. Gross margin expanded and adjusted SG&A increased 6.5%. Adjusted EBIT margin expanded 70 basis points to 9%, showing an ability to convert top line growth into margin expansion.

A：The company plans to prioritize high ROI growth opportunities while returning at least 50% of free cash flow to shareholders through dividends and opportunistic share repurchases.

A：The adjusted diluted EPS is raised to the range of approximately $1.46 to $1.52 for the full year, up from the previous range of $1.42 to $1.48.

A：The company is leaning into newness and lifestyle offerings, as evidenced by the success in the women's business and the performance of signature products which satisfy an important part of their segmentation strategy for more value-oriented consumers. Core and even premium consumers are benefiting from the company's approach, which includes a focus on wholesale trends and variations.

A：Europe's performance in the first half was up 5%, consistent with the forecast, with strong demand and margin expansion. The Dounans distribution center had a significant impact in quarter 2, contributing about 8 percentage points to Europe's performance, which otherwise would have been -7% but turned into a positive 7%.

A：The company expects DDC to grow in the mid to high single digits for the remainder of the year. The wholesale segment is a major part of the business, and the recent performance reinforces confidence in the second half and the full year outlook. Free books sales have shown high single-digit growth, which is a positive indicator for the company's H2 and full year performance.

A：Gross margins have increased over 300 basis points, and distribution costs have decreased by 100 basis points, reflecting the success of the company's distribution strategy. Europe has seen significant improvements in operating margins, and unlike other companies, the firm is well-prepared for hot weather conditions.

A：The company is experiencing broad-based growth across channels, genders, categories, and geographies, which is a direct result of its ongoing strategy. In the most recent quarter, DTC and wholesale both had positive sales growth. The women's business showed strong double-digit growth, and the men's business, which is highly mature, also experienced growth. Both tops and bottoms saw growth in the women's business, with the Europe region also showing significant growth. The company's expanded addressable market is significant, moving from playing in the denim bottoms business to apparel with a focus on head-to-toe denim lifestyle.

A：The consumer's resilience is evident in the company's strong quarterly results, with growth across channels, geographies, and categories. The company anticipates a healthy demand situation, with 66% of growth driven by units, largely due to the expanded TAM and underpenetrated areas, especially in women and tops. The company is seeing strength across value, core, and premium segments. Despite macro uncertainty, the company remains optimistic about the second half of the year, with prudent revenue expectations reflecting a conservative approach to growth.

A：Beyond Yoga is experiencing robust double-digit growth, with the current quarter showing sales in the high teens. The brand is expanding beyond traditional active wear into lifestyle apparel, achieving consumer resonance with casual pants and travel wear. The brand has introduced new products like linen tops, sweaters, and dresses that have performed well. The brand has less than 20 stores but is optimistic about its multi-channel approach and is learning from the new merchandising approach in its stores. The brand is also looking forward to growing the men's category. In terms of marketing, the team continues to deliver innovative campaigns that leverage global and local presence, with a focus on agility and maximizing brand moments like the recent World Cup event at Levi's Stadium.

A：The Behind every Originals campaign and Rosie's collaboration are fueling the business in Asian markets, particularly among women, through pop-ups and product collaborations.

A：Being brand-led is an important part of the company's strategy to win in the market, alongside product and execution. The team is doing an outstanding job under this approach.

A：The ERP implementation is projected to be completed by the middle of 2027. It is expected to unlock data for the company, ensuring timely and regular access to data for users, which will help in seeing real-time movements of goods across different regions. This data will facilitate leveraging AI and is anticipated to lead to improved margins.

A：The key drivers of unit growth include increasing market share and sustainable growth, with two-thirds of the growth attributed to units and one-third to AUR in the quarter mentioned. AUR growth is attributed to a higher mix of full price selling, growth in distribution centers (DCCs) with higher AUR than wholesale, and category expansion in areas like women's apparel.

A：EBIT margins improved by 150 to 200 basis points in the second quarter, largely due to strong gross margins despite a slight drag from foreign exchange (FX). The fourth quarter is expected to show a meaningful step-up in expense leverage, with gross margins similar to the third quarter. Factors contributing to the EBIT margin improvement include volume leverage, reduced spending in the first half due to advertising in Q1, and the closure of Hebron which will result in lower distribution expenses.

A：The transition from the USCC is taking longer than anticipated. The company does not expect to see the full impact in the third quarter since the timing and magnitude of cost savings are still unclear. There has been no guidance given for this transition, and the potential cost savings are uncertain due to ongoing fluidity in the conversation around tariffs.

A：The slight delay in US distribution and the decision to close Hebron are due to strong demand which has been evident from the year's results. The intention is to taper off distribution and close Hebron towards the beginning of the second half and move operations to the center in Groveport, Ohio. This decision is a couple of million dollars investment to ensure the demand is service and the company is serious about it.

A：Within the denim category, key trends and growth opportunities include a growing down category, market share gain, and an expected growth over the next five years, even outpacing apparel. There is also a pivot towards a head-to-toe denim lifestyle, which increases the addressable market and provides a runway for continued growth.

A：From expanding the 'blue tab business', the company has learned that its consumer is resilient, newness and value offerings are well-received, and the brand's durable and dependable nature plays well in the market. There is also a focus on innovation and a reduced reliance on promotions, as evidenced by two-thirds of the increase being around unit growth and only a third on pricing, with much of the pricing increase driven by the premiumization strategy.

A：The premium denim segment is performing well, with Levi's denim commanding higher price points and showing a 40% increase in the first quarter. The company has created a sub-brand opportunity for premium denim and is optimistic about its potential to reach over 100 million to 200 million dollars. Future plans include expanding the lifestyle assortment beyond bottoms to include tops, sweaters, and shirting.

A：The company continues to see momentum in the business, and while they do not provide intra-quarter updates, the recent trends support the third-quarter outlook and full-year guidance. Demand remains healthy and is expected to close the year with balanced growth between units and revenue, with growth being broad-based. Concerns about Europe are noted, but pre-bookings for the second half are encouraging, and there is a positive outlook for single-digit growth in Europe for the year.