Levi Strauss posts strong Q1 sales growth but EPS gains driven by non-operating items amid macro risks

Levi Strauss reported strong first-quarter 2026 results with double-digit sales growth across all channels and regions. Nearly half of sales now come from the direct-to-consumer channel, showing robust growth. However, earnings per share (EPS) improvements are mainly due to non-operating factors like foreign exchange gains and legal settlements, not core business performance. Despite a solid balance sheet and proceeds from selling Dockers supporting share buybacks, risks remain from weak consumer confidence and high energy costs. The stock is rated hold due to valuation not reflecting these macroeconomic risks and unsustainable EPS drivers.