Why Is LEVI Stock Down Today: Tariff Costs Offset Forecast Raise

Levi Strauss & Co. shares tumbled in premarket trading on Friday, October 10, 2025, despite the denim maker raising its annual profit forecast. The stock fell approximately 7% to $23.13 in premarket trading at 7:21 AM EDT, representing a 5.71% decline from the previous close of $24.54. Investors focused on the company’s warning of significant tariff-related margin pressures in the fourth quarter, which overshadowed otherwise strong demand for its wide-leg denim products among Gen Z consumers in Europe and the Americas.

Tariff-Driven Margin Impact Weighs on Fourth-Quarter Outlook

While Levi Strauss reported a surprise earnings increase for its fiscal third quarter and raised its 2025 sales and profit forecasts on Thursday, the market response was decidedly negative. The company now expects annual adjusted earnings-per-share in the range of $1.27-$1.32, up from its prior forecast of $1.25-$1.30 per share. However, the midpoint of this guidance falls below analyst estimates of $1.31 per share. The company warned of a 130-basis-point hit to its fourth-quarter gross margins, directly attributable to the Trump administration’s shifting tariff policies.

Levi Strauss sources the bulk of its products from South Asian countries including Bangladesh, Cambodia, and Pakistan—nations that currently face high tariffs under U.S. trade policy. The company has secured approximately 70% of its holiday inventory early and implemented slight price increases to mitigate tariff impacts. The forecast assumes U.S. tariffs will remain at 30% for China and 20% for other countries through year-end. Wall Street analysts characterized the outlook as “conservative,” with Barclays noting that the lackluster forecast came despite the company seeing no adverse changes in shopping trends in September.

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LEVI Stock Slides but Long-Term Gains Remain Intact

Despite the premarket decline, Levi Strauss stock has climbed approximately 40-45% year-to-date through October 9, 2025, significantly outperforming the S&P 500’s 14.51% gain over the same period. The stock closed at $24.54 on October 9, down $0.12 or 0.49% from the previous day’s close of $24.66. With a market capitalization of approximately $9.7 billion and a trailing P/E ratio of 23.37, the company’s valuation metrics reflect investor optimism about its turnaround under CEO Michelle Gass, who has successfully capitalized on the resurgence of baggy, loose-fit apparel.

The company’s forward price-to-earnings multiple of 16.94 sits between competitors, higher than Abercrombie & Fitch’s 7.48 and American Eagle Outfitters’ 11.38, but below Ralph Lauren’s 20.59. Trump’s trade policies have similarly pressured margins at other retailers including Ralph Lauren, Abercrombie & Fitch, and Tapestry. However, Morgan Stanley analysts noted that investors appeared disappointed by the fourth-quarter outlook, suggesting the holiday-quarter sales “will likely look optically worse on tougher compares.” The stock’s 52-week range spans from $12.17 to $24.82, with analyst price targets averaging $25.31.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.