Levi Strauss & Co.

Good day, ladies and gentlemen, and welcome to the Levi Strauss & Co.'s second quarter fiscal 2026 earnings conference call for the period ending May 31, 2026. All parties will be in a listen-only mode until the question-and-answer session, at which time instructions will follow. This conference call is being recorded and may not be reproduced in whole or in part without written permission from the companies. This conference call is being broadcast over the internet and a replay of the webcast will be accessible for one quarter on the company's website, LeviStrauss.com. I would now like to turn the call over to Aida Orphan, Vice President of Investor Relations at Levi Strauss & Co.

Thank you for joining us on the call today to discuss the results for our second quarter of fiscal 2026. Joining me on today's call are Michelle Gass, our President and CEO, and Harmit Singh, our Chief Financial and Growth Officer. We'd like to remind you that we will be making forward-looking statements based on current expectations, and those statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in our reports filed with the SEC. We assume no obligation to update any of these forward-looking statements. Additionally, during this call, we will discuss certain non-GAAP financial measures, which are not intended to be a substitute for our GAAP results. Definitions of these measures and reconciliations to their most comparable GAAP measure are included in our earnings release, available on the IR section of our website, investors.levistrauss.com. Please note that Michelle and Harmit will be referencing organic net revenues or constant currency numbers, unless otherwise noted, and information provided is based on continuing operations. Finally, this call is being webcast on our IR website and a replay of this call will be available on the website shortly. Today's call is scheduled for one hour, so please limit yourself to one question at a time to allow others to have their questions addressed. And now I'd like to turn the call over to Michelle.

Thank you and welcome everyone to today's call. We're pleased to report another strong quarter with Q2 exceeding expectations across the top and bottom line. These results highlight the strength of our business model, underpinned by the enduring power of our iconic brand, and how we're driving growth across markets, channels, categories, and consumer demographics. The progress we're delivering today is the direct result of the strategic choices we've made to sharpen our focus and unlock the full potential of the Levi's brand, choices that have positioned us to capture our highest return growth opportunities. As we continue to evolve into a GDC-first lifestyle company, we are driving more consistent and faster growth, expanding our addressable market, and improving our profitability. Quarter after quarter, our results demonstrate that our strategies are working and momentum is building. And we believe we are still in the early innings of unlocking the full opportunity ahead, with more ways to win than ever before. Let's now turn to the details of the quarter. As a reminder, all numbers Harmit and I will reference are on an organic basis. We delivered solid top-line performance this quarter, with organic net revenues up 6%. Our international markets continue to demonstrate strong momentum, led by a 12% increase in Asia, while the U.S. delivered a 6% increase. Our direct-to-consumer business continues to lead our growth, with revenue up 8% and comparable sales up 6% in Q2. delivering our 17th consecutive quarter of comp growth. Global wholesale increased 3%, led by strength in the US wholesale channel. Our evolution into a denim lifestyle brand is enabling us to continue to drive outsized performance in women's, up 11% in the quarter. And we further extended our leading market share position in both men's and women's, reflecting the strength of our brand, impactful marketing, and a steady pipeline of product innovation. Importantly, top line momentum translated into strong bottom line delivery with margin expansion and strong earnings growth. On the strength of our performance, we're raising our full year sales and EPS guidance. Harmit will share more shortly. I'll now walk you through highlights from the quarter in the context of our strategies. Our first strategy is to be brand led. Powered by a best-in-class global marketing team that moves with agility and keeps Levi's firmly at the center of culture around the world. In Q2, we continued to build on our global behind-every-original campaign, following its successful launch at the Super Bowl earlier this year. The campaign features a dynamic mix of cultural voices across music, sport, and fashion, including Dochi, Questlove, and basketball superstar SGA. In line with our strategy to align global campaigns with local relevance, we expanded the talent roster to include top local talent across key markets, including Mexican pop star and actress Belinda and leading Bollywood actress Alia Bhatt. We also activated our collaboration with K-pop superstar and Levi's brand ambassador, Rosie, through pop-up shops in key Asian markets, reinforcing our focus on growing the women's business in the region. Ahead of the Global Soccer Championship, Levi's launched denim product collaborations with the U.S., Mexico, England, and France football federations. And when the Soccer Championship came to Levi's Stadium in June, our team turned a branding restriction into a viral marketing campaign, demonstrating our ability to operate at the speed of culture through bold, agile execution. This drove the most viewed, shared, and commented post in Levi's history, generating approximately a billion press impressions. Now turning to product. As I mentioned earlier, we remain in the early innings of capturing a significant opportunity ahead, and our product engine, rooted in denim, is central to unlocking that growth. For more than 150 years, denim has anchored the global wardrobe. Outlasting virtually every trend in fashion. It began as practical workwear and yet has become a global symbol of style and self-expression. Today, the continued trend toward casualization is a structural tailwind fueling denim growth globally. And the category is projected to grow mid-single digits annually through 2030, outpacing the category's historical growth. As the global market share leader in denim, Levi's is uniquely positioned to capture this opportunity, and we are accelerating that capture through a steady pipeline of innovation in fits and fabrics. In Q2, our bottoms business grew 6%, driven by strength in core fits, with newness adding incremental momentum. Looser silhouettes continued to deliver solid growth. Our 501 90s for her and 501 loose for him were key standouts in the quarter. reinforcing both the longevity and relevance of our core icons. We're also seeing continued strength across a range of other silhouettes, including our cinch baggy franchise, wide leg, and low loosened women's, and relaxed and boot cut in men's. Importantly, our core fits across skinny, slim, boot cut, and straight continue to make up the majority of our bottoms business, reflecting our healthy and diversified bottoms portfolio. Our push into categories beyond denim bottoms has expanded our total addressable market and contributed roughly a third of our top line growth in the quarter. This reflects our strong progress in expanding our assortment for summer, creating more warm-weather, head-to-toe offerings for our consumers. We're seeing strength across key summer categories, including lightweight denim, linen shirts, and dresses. Our expanded shorts assortment is also resonating, with the category up 11% in the quarter. In women's, we also saw exceptional strength in seasonal trends, including white denim, which grew 70%. Strong in-store execution is bringing these assortments to life through compelling merchandising, outfitting, and seasonal storytelling. We're making great progress in our evolution into a true head-to-toe denim lifestyle destination, and our tops business remains a meaningful opportunity to expand our total addressable market. In Q2, tops were up 5%. or up 7% when excluding the impact of the European Distribution Center transition last year. Newer categories like blouses, wovens, sweaters, and polos are driving strong growth, outpacing legacy categories like graphic tees. As these legacy categories continue to mature within our portfolio, we're actively refining how we invest across our traditional and newer styles to maximize the opportunity. and we expect the business to accelerate in the second half of the year. BlueTab continues to gain traction as the most premium expression of our brand. Importantly, BlueTab is introducing the Levi's brand to a new consumer and we are already seeing early share gains at the premium end of the category. While still in the early stages, we see significant runway ahead as we scale the business, unlocking a sizable premium segment that remains under-penetrated for Levi's today. Now shifting to our strategy to become a best-in-class DTC-first retailer. Our global direct-to-consumer business was up 8% in Q2 and comprised 51% of total company revenue in the quarter. Comparable sales were up 6%, underscoring the strength of our retail execution, with gains across key store KPIs, including UPT and AUR. Our continued efforts to premiumize the site experience and elevate our online assortment drove another strong quarter in our e-commerce channel, up 17%. E-com growth was fueled by solid performance across all key metrics, including increased traffic, better conversion, higher UPT, and AUR growth as we reduced promotional activity on our site. This business has grown almost 60% over the past three years, yet still only comprises approximately 12% of our overall revenues, remaining under-penetrated versus peers and representing a meaningful opportunity for continued growth. This quarter, we welcomed 3 million new members to our loyalty program, bringing global membership to nearly 50 million. We're continuing to enhance the program through more personalized experiences and leveraging our data to deliver more relevant and connected interactions. Global wholesale was up 3%, reflecting strength across customers in U.S. wholesale. The women's business was a particular standout, and sellout trends across the U.S. wholesale channel remain healthy. Globally, our wholesale partners are increasingly leaning into our diversified lifestyle assortment, reflecting strong consumer demand and confidence in our broader offerings. Now turning to our third strategy, powering the portfolio. While international represents approximately 60% of our business today, we see significant runway ahead, with many markets still early in their growth journey. This quarter, international revenue grew 6%, led by double-digit gains in Asia and Latin America. This year, we celebrate 60 years of the Levi's brand in Mexico, our second largest market globally and a key contributor to international performance, with Q2 growth of 15%. Supported by strong brand equity, Mexico remains both a meaningful revenue driver and a cultural and strategic hub. Across Latin America, momentum is accelerating with double-digit growth led by Brazil, the Andes, and Colombia. We see continued opportunity to build on this strength through store openings, e-commerce, and wholesale expansion. In Asia, performance was strong across markets with Q2 growth led by Turkey, Japan, and India. In China, we are beginning to see signs of progress, supported by new leadership and improvements in product and execution. While still early, we're encouraged by a return to growth and improving underlying trends. Signature, our value-focused brand, grew at a low single-digit rate in Q2 and was up 9% for the first half of the year. We expect growth to continue and build through the second half of the year, supported by an expanded lifestyle assortment including a broader TOPS offering. Beyond Yoga was up 16% led by strength in e-commerce. Momentum continues to be fueled by newness and expansion into lifestyle categories including the launch of a new linen capsule which quickly became one of the brand's top selling collections. In closing, this quarter again reinforces the strength of our strategy and the progress we're making. We've sharpened our focus elevated the Levi's brand and raised our level of execution, building a stronger and more durable business. While we remain mindful of the external environment, the momentum we're seeing across our strategic priorities gives us confidence in the path ahead. I want to thank our teams around the world for their relentless focus on the consumer and the disciplined execution that continues to drive our results. With that, I'll turn it over to Harmit. Harmit?