06:31 AM EDT, 04/08/2025 (MT Newswires) -- Levi Strauss (LEVI) shares jumped after the denim maker's finance chief said tariffs are expected to have a "minimal impact" on its fiscal second-quarter margin, while the company maintained its full-year outlook as earnings topped market estimates in the preceding period.

The apparel company is in the process of planning scenarios and mitigation strategies in light of a "fluid and unprecedented" situation, Chief Financial Officer Harmit Singh said during a late Monday earnings call, according to a FactSet transcript.

"Our Q2 outlook remains consistent with our internal plan," Singh said. "The effects of tariffs will have a minimal impact to our margin structure in the quarter, as most of the product for spring, early summer is already in the US."

US President Donald Trump announced sweeping new tariffs last week on imports from several countries, including China and Japan. On Monday, Trump threatened more tariffs against China, effective Wednesday, unless Beijing reverses its recent retaliatory actions.

"We recognize this is a quickly evolving macro situation and we have to see where the dust settles to give you the guidance that is going to be as helpful to you as possible," Singh said.

Gross margin is forecast to rise between 80 and 100 basis points, while reported revenue is set to be flat to up 1%, Singh said. Adjusted per-share earnings are expected to be in a range of $0.11 to $0.13, the CFO added. The current FactSet consensus among 12 analysts is for $0.14.

The company continues to project adjusted EPS of $1.20 to $1.25 for fiscal 2025, including a foreign-exchange headwind of $0.20. The Street is looking for non-GAAP EPS of $1.22. Revenue is still seen declining by 1% to 2% on a reported basis while organic sales are pegged to rise by 3.5% to 4.5%.

"While we recognize that we are operating in an uncertain environment, our global footprint, strong margin structure, and agile supply chain position us to navigate the balance of the year and beyond," Chief Executive Michelle Gass said in a statement. The company's stock climbed nearly 13% in premarket activity.

Levi Strauss kept its guidance unchanged after classifying results from its Dockers business as discontinued operations. In October, the group disclosed plans to explore strategic alternatives for the brand, including a potential sale. The outlook also excludes any potential impact from the recently announced tariffs, the denim maker said.

For the three months ended March 2, adjusted EPS increased to $0.38 from $0.25 the year before, topping the average FactSet analyst estimate of $0.28. Reported revenue rose 3% to $1.53 billion, but fell short of the market view for $1.54 billion.

The direct-to-consumer channel saw sales move 9% higher, with double-digit gains in Europe and Asia, as well as an 8% increase in the US. E-commerce advanced by 13% while wholesale net revenue declined 3%. Gross margin expanded by 330 basis points on a yearly basis to 62.1% during the quarter, boosted by lower product costs and favorable channel and brand mix.

"Our shift to becoming a (direct-to-consumer)-first company is driving both strategic and financial value," Gass said on the call. "In (the first quarter), we exceeded expectations across sales, margins and EPS, driven by the momentum of our strategy."