06:40 AM EDT, 10/10/2025 (MT Newswires) -- Levi Strauss (LEVI) shares fell early Friday as the denim maker issued a downbeat fiscal fourth-quarter profit outlook amid tariff pressures, even as it reported an unexpected jump in earnings for the previous three-month period and raised its full-year forecast.

Adjusted earnings are anticipated to come in between $0.36 and $0.38 per share for the ongoing quarter, while revenue is projected to be down about 3%, Chief Financial Officer Harmit Singh said during a late Thursday conference call, according to a FactSet transcript. The current consensus on FactSet is for non-GAAP EPS of $0.39 and sales of $1.71 billion for the quarter.

For fiscal 2025, the apparel retailer expects US tariffs on Chinese imports to remain at 30% and duties for the rest of the world to be at 20% for the remainder of the year. This represents a headwind of $0.03 a share to adjusted EPS in the fourth quarter and an 80-basis-point impact on gross margin, Singh said on the call.

Levi Strauss shares fell 6.6% in the most recent premarket activity.

The company now forecasts adjusted EPS to be in a range of $1.27 to $1.32 for the full year, up from its previous guidance of $1.25 to $1.30. Revenue is estimated to grow by about 3%, compared with the prior outlook for a gain of 1% to 2%. The Street is looking for non-GAAP EPS of $1.32 and sales of $6.19 billion.

"We estimate the full-year gross impact of tariffs before mitigation to be approximately a 70 basis point headwind to gross margin compared to 50 basis points previously," according to Singh. "However, given the (third-quarter) results and after mitigation, we continue to expect only a 20 basis point impact to gross margin."

The retailer is continuing its efforts to offset the impact of tariffs heading into 2026, including targeted pricing actions and supply chain diversification, the CFO added.

For the three months ended August, Levi Strauss' adjusted EPS ticked up to $0.34 from $0.33 the year before, defying the average analyst estimate for a decline to $0.31. Revenue improved 7% to $1.54 billion, ahead of the Street's view for $1.5 billion. Organic sales also advanced 7% year over year.

The direct-to-consumer channel saw sales climb 11%. E-commerce jumped by 18% while wholesale net revenue inclined 3%. Revenue grew across the Americas, Europe and Asia. Gross margin rose by 110 basis points year over year to 61.7% during the quarter, boosted by favorable channel mix and price hikes.

"Strength was once again broad based across our business, including (direct-to-consumer) and wholesale, international and domestic, women's and men's and tops and bottoms," Chief Executive Michelle Gass said on the call. "The results we delivered this quarter against an increasingly complex backdrop are yet another proof point that our strategies are working."