Levi Strauss & Co. (LEVI): Business Model Canvas [Dec-2025 Updated]

You're looking at the old-school denim giant and wondering if its heritage is enough to power future returns, especially with all the talk about digital transformation. Well, after digging into the numbers as of late 2025, the story is clear: the pivot to Direct-to-Consumer (DTC) is working, driving 46% of Q3 revenue, and the company hit a record gross margin of 62.6% in Q2. Still, this isn't just about selling jeans; it's about AI partnerships and managing supply chain tariffs. Dive below to see exactly how this heritage brand is balancing its iconic status with a very modern, digitally-focused playbook.

Levi Strauss & Co. (LEVI) - Canvas Business Model: Key Partnerships

You're looking at how Levi Strauss & Co. builds strategic alliances to scale its DTC-first pivot and drive operational excellence. These aren't just vendor relationships; they are core enablers for hitting that ambitious $10 billion revenue target, which is a significant jump from the reported $6.4 billion net revenue in fiscal year 2024.

The Key Partnerships block is where Levi Strauss & Co. finds the specialized expertise and market access it needs to compete effectively.

Technology and Operational Backbone

The partnership with Microsoft is central to rewiring internal operations. They are developing an integrated agentic AI orchestration platform, a single "super-agent" built on Azure and embedded in Microsoft Teams. This system, scheduled for rollout to corporate employees in early 2026, integrates specialized sub-agents across IT, human resources, and operations to simplify and automate task-driven work. This internal efficiency gain is directly linked to supporting the company's growth trajectory.

For the physical movement of goods, the collaboration with o9 Solutions is revolutionizing fabric procurement. This AI-powered supply chain planning platform acts as an open marketplace, giving real-time visibility into material availability. Historically, identifying the right fabric could take over 60 days of individual supplier contact. Now, with modules like Raw Materials Planning and MRP-driven Agility already developed, the system allows for faster order assignment and real-time supply-to-demand matching, down to the component level. Levi Strauss & Co. planned to roll out a total of five system modules with o9 Solutions by early 2025, which has already shown incredible early results in reducing fabric and sundries liabilities.

Scaled Market Reach

To ensure scaled reach beyond owned channels, Levi Strauss & Co. relies on major wholesale partners like Zalando and Amazon. The successful launch of Levi's marketplaces on these platforms is designed to strengthen brand equity while connecting with fans across Europe and other key digital territories. In the U.S., for instance, Levi's wholesale business grew 7% in Q2 2025, reflecting continued strength in digital and premium accounts. To put the scale of these partners in context, Zalando reported 2024 revenue of €10.6B and guides for 2025 revenue of €12.1B, while Amazon reported Q1 2025 sales of $155.7 billion. This contrasts with Levi Strauss & Co.'s own DTC channel, which reached approximately 48% of total revenue in 2024.

Sustainability and Brand Iconography

Driving supplier sustainability is managed through the International Finance Corporation (IFC) Partnership for Cleaner Textiles (PaCT). This partnership incentivizes suppliers with lower interest rates via IFC's Global Trade Supplier Finance program for meeting climate commitments. The program provides in-depth assistance to around 40 designated suppliers and mills across 10 countries. A pilot program with six suppliers previously demonstrated success, reducing their GHG emissions by an average of nearly 20% and saving them over $1 million in operating costs collectively. Levi Strauss & Co. has a science-based target to reduce absolute Scope 3 GHG emissions from purchased goods and services by 40% by 2025 from a 2016 base year.

For major marketing impact, collaborations with global icons like Beyoncé are crucial for driving lifestyle relevance and diversifying the business mix. The 'Reimagine' global campaign, fronted by the superstar, has been explicitly linked to higher sales and profit growth, particularly boosting the women's business segment. This focus is key to evolving beyond core jeans into tops and non-denim categories. The fiscal year ended in December 2024 saw net revenue growth of 3% to $6.4 billion, with adjusted net income rising to $503 million from $441 million the prior year, momentum that these high-profile campaigns aim to sustain.

Here's a quick look at the scale of these relationships:

Partner Category	Specific Partner	Key Metric / Data Point	Context / Impact
Technology/AI	Microsoft	Rollout starting early 2026	Developing enterprise AI 'super-agent' to support the journey to a $10 billion retailer.
Supply Chain Planning	o9 Solutions	Reduced lead time from over 60 days	AI-powered open marketplace for fabric procurement; three modules launched, five more planned by early 2025.
Wholesale Reach	Zalando / Amazon	U.S. Wholesale grew 7% in Q2 2025	Marketplace launches scale reach; Zalando guides 2025 revenue to €12.1B.
Supplier Sustainability	IFC PaCT	Targeting 40% Scope 3 GHG reduction by 2025	Supports around 40 suppliers across 10 countries; pilot saved suppliers over $1 million collectively.
Marketing Icon	Beyoncé	FY2024 Net Revenue: $6.4 billion	Global campaign fueled sales/profit, especially in women's business, supporting diversification beyond core jeans.

The success of the IFC PaCT pilot, where six suppliers cut emissions by an average of nearly 20%, shows the tangible benefit of embedding sustainability goals directly into financing terms. Also, the company's global Red Tab loyalty program now spans 12 countries across Europe, connecting directly with over 40 million worldwide members, which is a critical internal asset that complements these external partnerships.

Levi Strauss & Co. (LEVI) - Canvas Business Model: Key Activities

You're looking at the core actions Levi Strauss & Co. is taking right now to drive its business forward, based on their latest filings through Q3 2025. These aren't just ideas; they are the operational mandates shaping their financial results.

Accelerating the DTC-first, omnichannel transformation.

The shift to Direct-to-Consumer (DTC) is central, showing up clearly in the revenue mix. For the third quarter ended August 31, 2025, DTC comprised 46% of total net revenues, up from 50% in Q2 2025, and 52% in Q1 2025. E-commerce revenue growth was strong, jumping 18% on a reported basis in Q3 2025. This strategy is clearly driving the company's stated ambition to become a $10 billion retailer.

Here's how the channel mix looked across the first three quarters of fiscal 2025:

Metric	Q1 2025	Q2 2025	Q3 2025
DTC Revenue as % of Total Net Revenues	52%	50%	46%
DTC Net Revenue Growth (Reported Basis)	9%	11%	11%
Wholesale Net Revenue Growth (Reported Basis)	-3%	3%	3%

Designing and merchandising a head-to-toe denim lifestyle product assortment.

Levi Strauss & Co. is actively working to move beyond just its iconic 501 Jeans to a full lifestyle offering. This diversification is showing up in category performance. As of Q1 2025, non-denim bottoms made up 35% of total sales. Furthermore, the women's segment has been a key focus, growing by double digits for two consecutive quarters and representing 38% of total revenues in Q1 2025.

Implementing AI for retail operations, e-commerce, and internal functions.

The use of Artificial Intelligence (AI) is integrated across the business, showing tangible financial results. Implementing AI-driven demand forecasting led to improvements in forecast accuracy by double-digit percentages. This smarter forecasting helped contribute to gross margins rising to 60% from 52.8% in some reported contexts. For the store footprint, the AI assistant named STITCH is being rolled out to 60 US locations. Internally, the company is developing an enterprise AI 'super-agent' with Microsoft, scheduled for an internal rollout starting in early 2026.

Key AI-driven operational metrics include:

• Forecast accuracy improvement: double-digit percentages.
• STITCH store assistant deployment: 60 US stores piloted/rolling out.
• Enterprise Super-Agent rollout start: Early 2026.

Managing an agile global supply chain to mitigate tariff and cost impacts.

Managing costs, especially from tariffs, is a constant activity. For Q3 2025, the gross margin was 61.7%, which successfully expanded by 110 basis points, more than offsetting 80 basis points of tariff headwinds. The company estimated the full-year gross margin impact from tariffs before mitigation to be approximately a 70 basis point headwind. To manage this, mitigation initiatives include vendor negotiation and supply chain diversification. Total inventories were up 12% in dollar terms in Q3 2025, partly due to higher product costs related to tariffs.

Executing the 2030 Water Strategy and 2025 GHG reduction targets.

Sustainability targets require ongoing execution. The 2019 goal to halve freshwater use in high-stress regions by 2025 was not fully met, as suppliers in those regions achieved only a 27% reduction by the end of 2024 against the 2018 baseline. This has led to the updated 2030 Water Strategy, which sets a new target to reduce freshwater use by 15% across the manufacturing supply chain by 2030, compared to a 2022 base year.

The company's climate targets include:

• 2025 GHG Target: Cut absolute Scope 1 and Scope 2 emissions by 90% (from a 2016 baseline).
• 2030 GHG Target: Cut absolute Scope 3 emissions by 42% (from a 2022 baseline).
• 2030 Water Reuse Target: Recycle or reuse 40% of water used in manufacturing.

Finance: draft 13-week cash view by Friday.

Levi Strauss & Co. (LEVI) - Canvas Business Model: Key Resources

You're looking at the core assets that let Levi Strauss & Co. operate and compete in late 2025. These aren't just line items; they are the tangible and intangible engines driving their strategy.

The most significant resource is, without question, the Levi's® brand itself. This isn't just a logo; it's a cultural touchstone built over a 172-year heritage, which the company continues to actively reinforce through cultural moments and high-profile collaborations. This brand equity underpins every pricing decision and marketing spend. Also critical is the physical presence, which includes a global retail footprint of approximately 3,400 stores and shop-in-shops, a key part of their direct-to-consumer (DTC) push that saw 33 net new stores added across the globe in 2024 alone.

Direct customer connection is managed through the Red Tab® loyalty program. As of March 31, 2025, this program boasts over 38 million worldwide members. This massive, engaged base provides invaluable first-party data, fueling personalization and driving the DTC channel, which has seen 13th consecutive quarter of global DTC comparable sales growth as of Q2 2025.

The operational backbone relies on technology and logistics. You see proprietary technology platforms being deployed to enhance the in-store experience, such as the STITCH store assistant and AI outfitting tools. Furthermore, the company leans on an agile global supply chain, which has been actively managed to diversify sourcing, with significant operations in Southeast Asia, helping them achieve a record gross margin of 62.6% in Q2 2025.

Here's a quick look at how these resources translate into financial performance through the first half of fiscal year 2025, showing the impact of their DTC-first strategy:

Metric	Period/Guidance	Value/Amount
Reported Net Revenues	Q2 2025	$1.4 billion
Organic Net Revenues Growth	Q3 2025 (Actual)	7%
Gross Margin	Q2 2025 (Record)	62.6%
Adjusted Diluted EPS Outlook	Full Year 2025 Guidance	$1.27 to $1.32
Full Year Organic Net Revenue Growth Projection	Updated FY2025 Outlook	Approximately 6%

The internal capabilities supporting these assets include specific operational strengths:

• Proprietary technology deployment for customer interaction.
• Agile global supply chain with diversified sourcing locations.
• Strong inventory management, securing the majority of Q2 U.S. orders by early April 2025.
• A commitment to ESG goals, targeting a 90% reduction in Scope 1 and 2 emissions by the end of 2025.

Finance: draft the Q4 2025 inventory turnover projection by next Tuesday.

Levi Strauss & Co. (LEVI) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Levi Strauss & Co. over competitors right now, late in 2025. It's about more than just pants; it's about heritage meeting modern performance, backed by real numbers showing traction.

The foundation remains the promise of authentic, durable, and high-quality denim and apparel. This isn't just marketing talk; the financial results reflect a strong pricing power and brand equity. For instance, the gross margin for the trailing twelve months (ttm) stood at 61.38%, showing the premium customers are willing to pay for that quality and authenticity.

The iconic brand status at the center of global culture is actively translating into sales momentum. The Levi's brand itself saw a 9% organic increase globally in Q2 2025, and an 8% global organic growth in Q1 2025. The company is raising its full-year fiscal 2025 organic net revenue growth projection to approximately 6%.

Levi Strauss & Co. delivers a full denim lifestyle offering beyond just jeans. While the core remains, the portfolio includes other brands, though the focus has sharpened following the reclassification of the Dockers® business as discontinued operations in Q1 2025. The Beyond Yoga® brand, part of the lifestyle expansion, posted net revenue increases of 10% in Q1 2025 and 2% in Q3 2025.

The commitment to sustainability is a key differentiator, with specific, measurable targets. Levi Strauss & Co. has set a new goal to reduce absolute water use by 15% across its manufacturing supply chain by 2030, using a 2022 base year. Furthermore, they aim for 40% of water used in manufacturing to be recycled or reused by 2030. To be fair, progress on an earlier goal was slower; the 2025 goal to cut water use by 50% in high-stress areas was only 27% achieved by the end of 2024.

You are experiencing a personalized omnichannel shopping experience and loyalty perks through an aggressive push to Direct-to-Consumer (DTC). This channel is clearly working, delivering its 13th consecutive quarter of global DTC comparable sales growth in Q2 2025. In Q1 2025, DTC net revenues grew 12% organically and accounted for 52% of total net revenues.

Here's a quick look at how the DTC focus is driving financial results, which directly supports the value proposition of a modern, customer-centric brand:

Metric	Period Ending Q1 2025	Period Ending Q2 2025	Period Ending Q3 2025
Reported Net Revenue Growth (YoY)	3%	6%	7%
Organic Net Revenue Growth (YoY)	9%	9%	7%
DTC Net Revenue Growth (Organic YoY)	12%	Not specified for DTC only	DTC Delivered High-Single Digit Comparable Sales Growth
Adjusted Diluted EPS (YoY Growth)	52%	37%	Not specified for Q3 2025

The company's overall financial health, with an adjusted diluted EPS outlook of $1.27 to $1.32 for 2025, shows that this blend of heritage and modern execution is paying off for shareholders.

The value proposition is also supported by the company's standing in the broader professional world, as evidenced by external recognition:

• World's Best Employers (2025): Ranked #778.
• Best Brands For Value (2025): Ranked #201.
• Best Brands For Social Impact (2025): Ranked #42.

Finance: draft the Q4 2025 cash flow forecast incorporating the raised FY25 organic revenue guidance of approximately 6% by Friday.

Levi Strauss & Co. (LEVI) - Canvas Business Model: Customer Relationships

You're building a brand that thrives on connection, and for Levi Strauss & Co., that means weaving the customer relationship deep into the fabric of the business, especially through its Direct-to-Consumer (DTC) push.

Red Tab® loyalty program offering exclusive benefits and tailor services.

The Red Tab® loyalty program is central to cultivating lifelong fans, not just repeat buyers. As of March 2025, this community boasts over 38 million worldwide members. Members get premium perks that go beyond simple discounts. For instance, they receive an extended product guarantee that includes lifetime access to tailoring services, such as repairs. The program also features a points system where members earn 1 point per $1 spent, excluding tax, shipping, and gift card value. These points can be redeemed in $5 increments, starting at 125 points (so, 125 points = $5 off). Any points accrued expire one year (365 days) from the date they are earned. This program is a key component of the DTC-first strategy, reinforcing engagement across channels.

Dedicated company-operated stores providing a full brand expression.

Company-operated stores are the physical manifestation of the brand experience. Levi Strauss & Co. has made significant progress in its DTC transformation, with DTC sales-which include e-commerce-accounting for 52% of total global net revenue in Q1 2025 (for the quarter ended March 2). The longer-term goal is for DTC to reach 55% of the business. Looking at Q3 2025 (ended August 31), DTC comprised 46% of total net revenues, with DTC net revenues increasing 11% on a reported basis year-over-year. The US store footprint stood at 458 locations as of Q3 2025. The company is even planning for expansion, with the Beyond Yoga banner reaching 14 stores by Q4 2025.

Here's a quick look at how the DTC and digital channels are performing relative to the overall business structure as of early to mid-2025:

Metric Category	Specific Data Point	Value / Percentage	Reporting Period / Date
DTC Channel Share (Total Revenue)	DTC Share of Total Global Net Revenue	52%	Q1 2025 (ended March 2)
DTC Channel Share (Total Revenue)	DTC Share of Total Net Revenues	46%	Q3 2025 (ended August 31)
E-commerce Channel Share (Total Revenue)	E-commerce Share of Total Net Revenue	12%	Q1 2025
Loyalty Program Size	Red Tab® Worldwide Members	Over 38 million	March 2025
Store Footprint	US Company-Operated Store Count	458	Q3 2025

Personalized digital engagement via the Levi's® app and e-commerce.

Digital engagement is a significant growth engine. E-commerce sales made up 12% of total Levi Strauss net revenue in Q1 2025. The momentum is clear: e-commerce sales grew 16% year-over-year in Q1 2025, and in the quarter ended August 31, 2025, online sales jumped 16% globally. To elevate this experience, the company has focused on content quality. As of May 2025, 80% of products on the US site feature new, elevated imagery, and more than 700 product pages include videos showing the product in motion. Personalization extends to assortment; the women's portfolio online in the US has grown to about 55% of the online assortment, up from under 40% previously.

Customer service and returns management across the omnichannel network.

The service experience is differentiated based on loyalty status, which is a key lever for driving membership. For online purchases, returns are FREE for Red Tab™ Members. However, for non-members, a $7.50 returns processing fee is deducted from the refund amount for the same online returns. If you return an item purchased online in a physical store, the return is free of charge for everyone, and refunds are processed instantly. This structure definitely incentivizes joining the loyalty program for frequent online shoppers.

• Red Tab™ Members receive free returns on all orders.
• Non-members incur a $7.50 fee for online returns processed by mail.
• In-store returns for online purchases are free for all customers.
• Members get free in-store hemming on Levi's® jeans purchased in mainline stores.

Levi Strauss & Co. (LEVI) - Canvas Business Model: Channels

You're looking at how Levi Strauss & Co. gets its product into the hands of customers, and honestly, the story here is all about the pivot to Direct-to-Consumer (DTC). It's a massive strategic shift, and the numbers from late 2025 really show it's paying off.

Direct-to-Consumer (DTC) retail stores (mainline and outlet)

The physical footprint remains important, but it's being refined. As of November 13, 2025, there are 244 Levi Strauss stores in the United States alone. Globally, the company runs nearly 460 Levi's locations across the Americas. This physical network supports the DTC strategy, even as the company navigates shifts in consumer traffic. To be fair, the company announced a plan to close more than 70 locations in the UK in 2025, reflecting a sharper focus on profitability and shifting resources toward more resilient channels, like outlets, which are described as "highly professionalised and profitable."

The DTC channel's success is clear when you look at the revenue mix:

• DTC accounted for 52% of total net revenues in the first quarter (Q1) of 2025.
• DTC comprised 50% of total net revenues in the second quarter (Q2) of 2025.
• DTC accounted for 46% of total net revenues in the third quarter (Q3) of 2025).

E-commerce platforms (Levi.com and the Levi's® app)

This is where the growth engine is really humming. The company has been doubling down on its digital flagship experience. Over the last five years, the e-commerce business doubled, moving from 5% of total net revenue in 2019 to 10% in 2024, and that momentum is definitely continuing into 2025. In Q3 2025, net revenues from e-commerce grew 18% on a reported basis and 16% organically. That strong digital performance is a key driver behind the DTC strategy's success.

Here's a quick look at how the primary revenue channels stacked up through the first three quarters of fiscal 2025:

Channel Metric	Q1 2025	Q2 2025	Q3 2025
DTC % of Total Net Revenues	52%	50%	46%
E-commerce Reported Growth (YoY)	13%	13%	18%
Wholesale Reported Growth (YoY)	Decrease of 3%	3% Increase	3% Increase

Wholesale distribution to department stores and specialty retailers

While DTC is the priority, wholesale still moves a significant portion of volume, though its growth rate has lagged the direct channel. In Q3 2025, wholesale net revenues increased 3% on a reported basis and 5% organically. That's a positive trend after Q1 2025, where wholesale net revenues actually decreased 3% on a reported basis, despite growing 5% organically. The company is evolving this footprint, focusing on where it makes the most sense strategically, rather than just volume.

Third-party e-commerce marketplaces like Amazon and Zalando

The search results don't break out specific revenue from third-party marketplaces like Amazon or Zalando, so we have to look at the broader e-commerce performance, which encompasses these partners. The strong double-digit growth in e-commerce revenue across Q1, Q2, and Q3 of 2025 suggests these platforms are contributing to the overall digital success. The company's focus is on creating a seamless digital flagship experience, which includes optimizing performance across all digital touchpoints where fans shop. For context, the sale of the Dockers intellectual property and operations in the US and Canada was completed on July 31, 2025, for gross proceeds of $194.7 million, simplifying the portfolio that flows through these various channels.

Finance: draft 13-week cash view by Friday.

Levi Strauss & Co. (LEVI) - Canvas Business Model: Customer Segments

You're looking at the customer base for Levi Strauss & Co. as of late 2025, and it's clear the company is segmenting its focus to drive profitable growth. The core denim enthusiasts, those seeking authentic, heritage products, are still the foundation, evidenced by the core Levi's brand global organic net revenues growing 8% in the first quarter of fiscal 2025 and 7% in the third quarter of fiscal 2025. This group is highly engaged through the company's own channels.

The younger, trend-aware consumers are being captured through a pivot toward a head-to-toe denim lifestyle retailer, which is showing up in channel performance:

• Direct-to-Consumer (DTC) net revenues increased 12% in Q1 2025.
• DTC comprised 52% of total global net revenues at the end of Q1 2025.
• E-commerce net revenues grew 16% organically in Q3 2025.
• Non-denim bottoms represented 35% of total sales as of Q1 2025.

The women's apparel segment is a major area of strategic capture, showing significant traction. This segment grew by double digits for two consecutive quarters and now represents 38% of total Levi Strauss & Co. revenues, based on Q1 2025 figures. The company is actively executing its strategy to gain greater share in this historically underpenetrated area, with women's contributing approximately 40% of the growth seen in Q3 2025, balanced by men's growth.

To map out how these customer groups translate across the business, here is a look at the revenue drivers as of the third quarter of fiscal 2025:

Segment/Channel Focus	Metric	Value/Percentage	Period Reference
Women's Segment Share	Share of Total Revenues	38%	Q1 2025
DTC Channel	Share of Total Net Revenues	46%	Q3 2025
E-commerce	Organic Net Revenue Growth	16%	Q3 2025
Wholesale Channel	Net Revenue Growth (Organic)	5%	Q3 2025
Beyond Yoga® Brand	Net Revenue Growth (Reported/Organic)	2%	Q3 2025

For environmentally-conscious consumers valuing sustainability and durability, Levi Strauss & Co. has concrete, measurable goals tied to its Climate Transition Plan. The company has committed to reducing its absolute scope 1 and 2 GHG emissions by 90% by 2050 from a 2022 base year. Furthermore, a near-term goal was set to use 100% renewable electricity in all company-owned and operated facilities by 2025. This focus on durable products and environmental stewardship is a key part of the value proposition for this customer set.

Finally, the global mass market is being addressed through a more streamlined brand portfolio. The company entered into a definitive agreement to sell its Dockers business in Q2 2025, reclassifying it as discontinued operations in Q1 FY25, signaling a reduction in focus on that specific mass-market offering. Conversely, the company continues to nurture other lifestyle categories, with the Beyond Yoga® brand reporting net revenues up 2% in Q3 2025.

Levi Strauss & Co. (LEVI) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive Levi Strauss & Co.'s operations as we approach the end of 2025. The cost structure is heavily influenced by manufacturing, distribution network transformation, and strategic investments in brand experience.

Cost of Goods Sold and Margin Dynamics

Cost of Goods Sold (COGS) remains a significant component, but Levi Strauss & Co. has been aggressively managing it through pricing and channel mix. The gross margin performance has been strong, hitting a record 62.6% in Q2 2025, according to your outline. By the third quarter, the gross margin had expanded by 110 basis points to 61.7% from 60.6% in Q3 2024, driven by favorable channel mix and price increases, even while tariffs created a headwind.

The shift to Direct-to-Consumer (DTC) is key here, as DTC net revenues increased 11% on a reported basis in Q3 2025, with DTC comprising 46% of total net revenues. This higher-margin business mix is helping to offset input cost pressures.

Metric	Value (Q3 2025 Reported)	Value (Full Year Guidance)
Gross Margin	61.7%	Expansion of 100 basis points
Gross Profit Dollars	$951.6 million	N/A
Tariff Headwind on Gross Margin (Q3 2025)	80 basis points	N/A

Selling, General, and Administrative (SG&A)

SG&A expenses are being managed to maintain leverage against revenue growth. For the full year 2025, the company continues to expect adjusted SG&A as a percentage of revenue to end the year at around 50%. In the third quarter, Adjusted SG&A was 49.8% of sales, though it did deleverage 160 basis points year-over-year due to factors like performance compensation and distribution costs.

The total SG&A dollars increased 6.8% to $776 million in Q3 2025 compared to $726 million in Q3 2024.

Supply Chain and Tariff Costs

Supply chain costs are a major variable, particularly due to geopolitical factors. The estimated impact from tariffs on profitability for the remainder of 2025, excluding mitigation efforts, was cited as being between $25 million to $30 million. The company's guidance for the latter part of the year assumes US tariffs will remain at 30 per cent for China and 20 per cent for other countries.

The company is actively remapping its distribution network to a hybrid model for omnichannel fulfillment, which involves short-term costs, such as running parallel Distribution Centers (DCs) in the U.S.. Distribution costs specifically increased from a year ago, with about half of that increase attributed to the cost of this parallel running.

Investments in Growth and Innovation

Costs are being incurred to fuel the DTC expansion and future-proof the product line. You're seeing this in capital expenditures for new physical locations and technology.

• Investment in DTC expansion included opening 14 new stores on a gross basis in Q3 2025.
• E-commerce net revenues grew 18% on a reported basis in Q3 2025, reflecting tech investment.
• The company has a long-term goal to reduce water use by up to 50% by 2025 in water-stressed areas, with Waterfive cents per unit for some suppliers.
• Levi Strauss & Co. is pioneering material innovations like cottonized hemp as an alternative to cotton, which requires significantly less fresh water.

For Research & Development (R&D) specifically, the reported expenses for the twelve months ending August 31, 2025, were $0M. Still, the commitment to sustainability targets by 2025, like achieving 100% renewable electricity in company-operated facilities, represents an ongoing operational cost and investment. Finance: draft 13-week cash view by Friday.

Levi Strauss & Co. (LEVI) - Canvas Business Model: Revenue Streams

You're looking at how Levi Strauss & Co. is pulling in its revenue as of late 2025, which is heavily influenced by its DTC-first pivot. It's all about direct customer relationships now.

The top-line performance for the third quarter of fiscal 2025 was solid, with Q3 2025 net revenues hitting $1.5 billion, reflecting a 7% increase year-over-year on both reported and organic bases. This growth is the engine driving the updated full-year expectations.

The revenue mix is clearly shifting to favor owned channels. Direct-to-Consumer (DTC) sales were the star performer, accounting for 46% of total net revenues in Q3 2025. This channel saw DTC net revenues increase 11% on a reported basis and 9% on an organic basis during the quarter.

The other major component is Wholesale sales to third-party retailers. While DTC leads, wholesale still contributes substantially, with wholesale net revenues growing 3% on a reported basis and 5% on an organic basis in Q3 2025.

The company is also generating Licensing revenue from trademarks for accessories and other categories, though specific financial figures for this stream in Q3 2025 weren't the primary focus of the latest reports, which centered on the core apparel sales.

Here's a quick look at the channel performance for Q3 2025:

Revenue Stream Component	Q3 2025 Reported Growth (YoY)	Q3 2025 Organic Growth (YoY)	Q3 2025 Share of Total Revenue
Direct-to-Consumer (DTC)	11% increase	9% increase	46%
Wholesale	3% increase	5% increase	Remaining Percentage

Looking ahead to the full-year FY25 outlook, the company projected organic net revenue growth to increase in the range of 4.5% to 5.5%, based on the guidance provided before the Q3 outperformance. However, following the strong Q3, management raised the latest full-year organic net revenue growth expectation to approximately 6%.

You can see the key revenue stream metrics here:

• Direct-to-Consumer (DTC) sales accounted for 46% of total net revenues in Q3 2025.
• Q3 2025 net revenues were $1.5 billion, a 7% increase.
• E-commerce net revenues grew 18% on a reported basis in Q3 2025.
• Beyond Yoga® brand net revenues were $33 million in Q3 2025.
• The latest full-year FY25 organic net revenue growth is now projected at approximately 6%.

Finance: draft 13-week cash view by Friday.