Levi Strauss & Co. (LEVI) Income Statement

The revenue trajectory is choppy, reflecting the cyclical nature of apparel demand. The 12.0% growth in 2024Q4 was likely a holiday-driven spike, while the -4.0% contraction in 2025Q4 suggests a pullback. However, the sequential improvement from 1.8% in 2025Q3 to 8.0% in 2026Q2 indicates a possible recovery, though sustainability is uncertain given the volatility.

The consistent gross margin expansion from 58.8% to 62.7% over the period suggests Levi's has been able to either raise prices or reduce product costs, likely through mix shifts or supply chain efficiencies. This is a positive structural trend, though it may face pressure if input costs rise or promotional activity increases. The margin now exceeds peers like PVH (57.5%) but trails Ralph Lauren (69.9%), indicating room for further optimization.

The dramatic improvement in operating margin from near zero to 15.3% indicates significant operating leverage. SG&A growth has been slower than revenue growth, as evidenced by the SG&A-to-revenue ratio dropping from 50.4% in 2024Q1 to 46.6% in 2026Q2. This suggests that Levi's is scaling its overhead efficiently, though the 2025Q2 dip to 7.5% operating margin shows that leverage can reverse quickly if revenue falters.

The primary cost driver is SG&A, which has been managed effectively, with the ratio declining by nearly 400 basis points. COGS as a percentage of revenue also improved from 41.2% to 37.3%, reflecting better product costs or pricing. This dual improvement has been key to margin expansion, but the 2025Q2 spike in SG&A to 55.6% of revenue shows that cost discipline can waver, likely due to marketing or promotional investments.