Levi Strauss & Co. cited double-digit ecommerce growth in its latest earnings results as overall net revenue increased 0.9% year over year to $1.77 billion in its fiscal Q4 ended Nov. 30, 2025.
The jeans and apparel brand recorded a 19% increase in net revenue from ecommerce, compared to the same period a year earlier. The online sales demonstrated not only the importance of Levi’s direct-to-consumer (DTC) business, but also why it is investing in artificial intelligence (AI) to further accelerate that growth.
Among the topics Levi’s leadership addressed from Q4, ecommerce, AI and tariffs all received mentions during the company’s Jan. 28 earnings call with investors.
Levi Strauss ranks No. 155 in the Top 2000. The database ranks North America’s largest online retailers by their annual ecommerce sales and more.
Levi Strauss ecommerce sales vs. overall revenue growth in Q4
While Levi’s net revenue growth hovered just under 1% in Q4, DTC growth outpaced that result, with ecommerce sales playing a key role. Ultimately, DTC net revenue grew 8% year over year on a reported basis. By region, Asia saw the strongest percentage growth at 11%, followed by 9% growth in Europe and 3% growth in the U.S. Ecommerce-associated net revenue alone increased by 19% on a reported basis from a year earlier (22% on an organic basis).
“Our efforts to build a strong digital foundation have enabled us to accelerate our ecommerce business,” said Michelle Gass, the CEO, president and director at Levi Strauss, speaking to investors. “And in Q4, we delivered another quarter of very strong ecommerce growth, up 22%.”
Levi’s noted in its earnings release that DTC made up 49% of its total net revenues in Q4. The company anticipated continued growth in its 2026 fiscal year.
“By channel, we expect DTC to grow high single digits, fueled by positive comp sales opening 50 to 60 net new system doors and continued growth in ecommerce,” said Harmit Singh, executive vice president and chief financial and growth officer, on the earnings call.
In the meantime, Levi’s executives intend to continue investing in AI-driven capabilities.
Levi’s work with Microsoft on new AI feature
“We are leveraging AI to make online shopping easier and more inspiring for our fans,” Gass stated on the earnings call. “We recently launched Outfitting, an AI-powered feature in the Levi’s app that creates style looks using our full assortment, purchasing behavior and product imagery.”
Levi’s has shared details behind its AI efforts previously, including work with Google Cloud to track emerging trends and Levi’s “super agent” platform developed with Microsoft.
“This year, we’ll evolve Outfitting with even more consumer-centric customization, and we’ll launch a new consumer-facing AI stylist chatbot that enables personalized recommendations through conversations,” Gass explained.
Meanwhile, its buildout of AI systems for internal use cases will proceed as well.
“We are also continuing to scale the use of AI and advanced analytics across the organization as we accelerate our shift to a best-in-class direct-to-consumer retailer,” she said. “For example, we recently announced our plans to develop and deploy an integrated agentic AI platform to simplify and automate task-driven work throughout the organization, driving efficiency, productivity and enabling growth. Built in partnership with Microsoft and as a frontier firm in the industry, we’re currently testing this technology and plan to roll it out to employees this year.”
How Levi’s views the impact from tariffs
Singh framed Levi’s Q4 growth as coming despite challenges that the company has seen from changes to tariffs on items being brought into the U.S. Levi’s gross margin in Q4 was 60.8% of net revenues, according to Singh. He said that represented a contraction of “100 basis points relative to last year, in line with our expectations, primarily due to the impacts of tariffs, which were partially offset by pricing actions and higher full-price selling.”
“Our disciplined approach to converting growth into profitability improved adjusted EBIT margin by 70 basis points in 2025,” Singh explained. “And we achieved this while navigating higher tariffs and investing in remapping our distribution network as we build the road map towards becoming a $10 billion DTC-first company.”
Looking ahead, he characterized AI as one of the answers to dealing with tariffs.
“In 2026, we will continue to grow adjusted EBIT margins through our relentless focus on driving higher revenue flow-through while making the right investments for our long-term growth, including growing our store base, AI capabilities and marketing,” he stated. “In addition, we’re making meaningful progress on mitigating tariff impacts on our P&L through targeted pricing actions, higher full-price selling, lower product costs and prudent management of our cost base.”
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