LEVI STRAUSS & CO

Previous wording

We are an iconic American company with a rich history of profitable growth, quality, innovation and corporate citizenship. Our story began in San Francisco, California, in 1853 as a wholesale dry goods business. We created the first riveted blue jean 20 years later. Today, we design, market and sell products that include jeans, casual and dress pants, activewear, tops, shorts, skirts, dresses, jackets, footwear and related accessories for men, women and children around the world under our Levi’s®, Dockers®, Signature by Levi Strauss & Co.™, Denizen® and Beyond Yoga®brands. We service consumers through our global infrastructure, developing, sourcing and marketing our products around the world.

Current wording

We are an iconic American company with a rich history of profitable growth, quality, innovation and corporate citizenship. Our story began in San Francisco, California, in 1853 as a wholesale dry goods business. We created the first riveted blue jean 20 years later. Today, we design, market and sell products that include jeans, casual and dress pants, activewear, tops, shorts, skirts, dresses, jackets, footwear and related accessories for men, women and children around the world under our Levi’s®, Dockers®, Levi Strauss Signature™, Denizen® and Beyond Yoga®brands. We service consumers through our global infrastructure, developing, sourcing and marketing our products around the world.

Previous wording

We recognize wholesale revenue from sales of our products through third-party retailers such as department stores, specialty retailers, third-party e-commerce sites and franchise locations dedicated to our brands. We also sell our products directly to consumers ("direct-to-consumer" or "DTC") through a variety of formats, including our own company-operated mainline and outlet stores, company-operated e-commerce sites and select shop-in-shops that we operate within department stores and other third-party retail locations. As of May 26, 2024, our products were sold in over 45,000 retail locations in more than 110 countries, including approximately 3,300 brand-dedicated stores and shop-in-shops. As of May 26, 2024, we had 1,234 company-operated stores located in 38 countries and approximately 550 company-operated shop-in-shops. The remainder of our brand-dedicated stores and shop-in-shops were operated by franchisees and other partners.

Current wording

We recognize wholesale revenue from sales of our products through third-party retailers such as department stores, specialty retailers, third-party e-commerce sites and franchise locations dedicated to our brands. We also sell our products directly to consumers ("direct-to-consumer" or "DTC") through a variety of formats, including our own company-operated mainline and outlet stores, company-operated e-commerce sites and select shop-in-shops that we operate within department stores and other third-party retail locations. As of August 25, 2024, our products were sold in over 45,000 retail locations in more than 110 countries, including approximately 3,400 brand-dedicated stores and shop-in-shops. As of August 25, 2024, we had 1,243 company-operated stores located in 39 countries and approximately 600 company-operated shop-in-shops. The remainder of our brand-dedicated stores and shop-in-shops were operated by franchisees and other partners.

Previous wording

Across all of our brands, pants – including jeans, casual pants, dress pants, shorts, skirts and activewear – represented 67% of our total units sold in the first six months of both 2024 and 2023. Tops – including shirts, sweaters, jackets, dresses and jumpsuits – represented 27% and 26% of our total units sold in the first six months of 2024 and 2023, respectively. The remainder of our products are footwear and accessories. Men’s products generated 63% and 64% of our net revenues in the first six months of 2024 and 2023. Women’s products generated 36% and 35% of our net revenues in the first six months of 2024 and 2023, respectively. The remainder of our products are non-gendered. Products other than denim bottoms – which include tops, pants excluding jeans, accessories and footwear – represented 40% and 39% of our net revenues in the first six months of 2024 and 2023, respectively.

Current wording

Across all of our brands, pants – including jeans, casual pants, dress pants, shorts, skirts and activewear – represented 66% and 67% of our total units sold in the first nine months of 2024 and 2023, respectively. Tops – including shirts, sweaters, jackets, dresses and jumpsuits – represented 28% and 27% of our total units sold in the first nine months of 2024 and 2023, respectively. The remainder of our products are footwear and accessories. Men’s products generated 62% and 64% of our net revenues in the first nine months of 2024 and 2023. Women’s products generated 36% and 35% of our net revenues in the first nine months of 2024 and 2023, respectively. The remainder of our products are non-gendered. Products other than denim bottoms – which include tops, pants excluding jeans, accessories and footwear – represented 41% and 40% of our net revenues in the first nine months of 2024 and 2023, respectively.

Previous wording

Our Europe and Asia businesses, collectively, contributed 44% of our net revenues in the first six months of 2024, as compared to 45% of our net revenues in the same period in 2023. Revenues from our international business, which includes our Europe and Asia segments, as well as Canada and Latin America from our Americas segment, was 58% in the first six months of both 2024 and 2023. Sales of Levi’s® brand products represented 88% and 87% of our total net sales in the first six months of 2024 and 2023, respectively.

Current wording

Our Europe and Asia businesses, collectively, contributed 44% of our net revenues in the first nine months of both 2024 and 2023. Net revenues from our international business, which includes our Europe and Asia segments, as well as Canada and Latin America from our Americas segment, was 58% in the first nine months of both 2024 and 2023. Sales of Levi’s® brand products represented 89% and 87% of our total net sales in the first nine months of 2024 and 2023, respectively.

Previous wording

Our wholesale channel generated 52% and 56% of our net revenues in the first six months of 2024 and 2023, respectively. Sales to franchise partners, included as a component of our wholesale channel, generated 6% of our net revenues in the first six months of both 2024 and 2023. Our DTC channel generated 48% and 44% of our net revenues in the first six months of 2024 and 2023, respectively, with sales through our company operated e-commerce sites representing 22% and 21% of DTC channel net revenues in the first six months of 2024 and 2023, respectively, and 11% and 9% of total net revenues in the first six months of 2024 and 2023, respectively.

Current wording

Our wholesale channel generated 54% and 57% of our net revenues in the first nine months of 2024 and 2023, respectively. Sales to franchise partners, included as a component of our wholesale channel, generated 6% of our net revenues in the first nine months of both 2024 and 2023. Our DTC channel generated 46% and 43% of our net revenues in the first nine months of 2024 and 2023, respectively, with sales through our company operated e-commerce sites representing 21% and 20% of DTC channel net revenues in the first nine months of 2024 and 2023, respectively, and 10% and 8% of total net revenues in the first nine months of 2024 and 2023, respectively.

Previous wording

Disruption of container shipping traffic through the Red Sea and surrounding waterways are affecting transit times and shipping costs for goods manufactured in Asia and destined to Europe (and to a smaller extent the Americas). We have taken actions to divert the flow of goods and are negotiating with shipping companies on the cost impacts to minimize impacts on the business.

Current wording

Disruption of container shipping traffic through the Red Sea and surrounding waterways is affecting transit times and shipping costs for goods manufactured in Asia and destined to Europe (and to a smaller extent the Americas). We have taken actions to divert the flow of goods and are negotiating with shipping companies on the cost impacts to minimize impacts on the business. Major port strikes on the East and Gulf Coasts of the United States could significantly disrupt our supply chain and our ability to service customer demand.

Previous wording

Inflationary pressures have negatively impacted our revenue, operating margins and net income in the three-month and six-month periods ended May 26, 2024 and May 28, 2023, adversely impacting consumer demand and increasing labor and product costs.

Current wording

Inflationary pressures have negatively impacted our revenue, operating margins and net income in the three-month and nine-month periods ended August 25, 2024 and August 27, 2023, adversely impacting consumer demand and increasing labor and product costs.

Previous wording

The first phase of the global productivity initiative occurred in the first half of 2024, resulting in the Company recognizing $171.3 million in restructuring charges, primarily due to severance and other post-employment benefits. The Company is changing its distribution strategy from an owned and operated model to a mix of owned and third-party operated distribution centers, which will result in the sale, lease or transfer of certain distribution centers currently owned and operated by the Company to third-party logistics providers. We also recognized $15.3 million of restructuring related charges in selling, general, and administrative expenses (“SG&A”) in the Company’s consolidated statements of operations, primarily consulting fees, and $5.5 million in goodwill impairment charges related to our footwear business as a result of the decision to discontinue the category. We may incur additional significant restructuring charges as we progress our global productivity initiative, which could be material in a future fiscal quarter or year.

Current wording

The first phase of the global productivity initiative was completed primarily in the first half of 2024, resulting in the Company recognizing $174.7 million in restructuring charges for the nine-month period ended August 25, 2024, primarily due to severance and other post-employment benefits, recorded within “Restructuring charges, net” in the accompanying consolidated statements of income. The Company is changing its distribution strategy from an owned and operated model to a mix of owned and third-party operated distribution centers, which will result in the sale, lease or transfer of certain distribution centers currently owned and operated by the Company to third-party logistics providers. During the nine-month period ended August 25, 2024, we also recognized $34.3 million of restructuring related charges primarily consisting of consulting fees and an impairment charge of $11.1 million related to capitalized internal-use software as a result of the decision to discontinue certain technology projects in connection with Project Fuel, recorded within Selling, general, and administrative expenses (“SG&A”) in the Company’s consolidated statements of income, and $5.5 million in goodwill impairment charges related to our footwear business as a result of the decision to discontinue the category recorded within Goodwill and other intangible impairment charges in the Company’s consolidated statements of income. We may incur additional significant restructuring charges as we progress our global productivity initiative, which could be material in a future fiscal quarter or year.

Previous wording

•Operating income. We recognized consolidated operating income of $21.9 million, compared to $9.9 million in the second quarter of 2023. The increase was primarily due to an increase in net revenues and gross profit, partially offset by the recognition of $55.1 million in restructuring charges. Operating margin was 1.5%, up from 0.7% in the second quarter of 2023, as a result of higher gross margin, partially offset by restructuring charges.

Current wording

•Operating income. We recognized consolidated operating income of $30.3 million, compared to $34.8 million in the third quarter of 2023. The decrease was primarily due to higher Beyond Yoga® goodwill and intangible impairment charges as well as higher corporate expenses as a result of Project Fuel, partially offset by an increase in gross profit driven by higher gross margin. Operating margin was 2.0%, down from 2.3% in the third quarter of 2023, as a result of higher impairment charges and corporate expenses, partially offset by the impact of higher gross margin.

Previous wording

•Net income (loss). We recognized consolidated net income of $18.0 million, compared to a net loss of $1.6 million in the second quarter of 2023. The increase is primarily driven by higher operating income described above.

Current wording

•Net income. We recognized consolidated net income of $20.7 million, compared to $9.6 million in the third quarter of 2023. The increase is primarily driven by a pension settlement loss in the prior year quarter, which offset the impact of the slight decrease in operating income.

Previous wording

•Adjusted EBIT. Compared to the second quarter of 2023, Adjusted EBIT increased 176.2% to $87.0 million from $31.5 million. The increase is due to higher revenue mostly due to the timing shift described above, partially offset by higher Adjusted SG&A expenses in the current year. As a result, Adjusted EBIT margin was 6.0%, 360 basis points higher than the second quarter of 2023 on a reported basis, and 380 basis points higher on a constant-currency basis.

Current wording

•Adjusted EBIT. Compared to the third quarter of 2023, Adjusted EBIT increased 27.3% to $175.4 million from $137.8 million. The increase is due to higher gross profit described above, partially offset by higher Adjusted SG&A expenses in the current year. As a result, Adjusted EBIT margin was 11.6%, 250 basis points higher than the third quarter of 2023 on a reported basis, and 260 basis points higher on a constant-currency basis.

Previous wording

•Adjusted net income. Compared to the second quarter of 2023, Adjusted net income increased to $66.2 million from $15.2 million. The increase is due to higher Adjusted EBIT as described above.

Current wording

•Adjusted net income. Compared to the third quarter of 2023, Adjusted net income increased to $131.9 million from $112.0 million. The increase is due to higher Adjusted EBIT as described above.

Previous wording

•Diluted earnings (loss) per share. We recognized diluted earnings per share of $0.04, compared to a diluted loss per share of $(0.00) in the second quarter of 2023.

Current wording

•Diluted earnings per share. We recognized diluted earnings per share of $0.05, compared to $0.02 in the third quarter of 2023. Currency translation did not have a significant impact on diluted earnings per share.

Previous wording

•Adjusted diluted earnings per share. Compared to the first six months of 2023, Adjusted diluted earnings per share increased to $0.42 from $0.37, due to the higher Adjusted net income described above. Currency translation did not have an impact on Adjusted diluted earnings per share.

Current wording

•Adjusted diluted earnings per share. Compared to the third quarter of 2023, Adjusted diluted earnings per share increased to $0.33 from $0.28, mainly due to the higher Adjusted net income described above. Currency translation did not have a significant impact on Adjusted diluted earnings per share.

Previous wording

•Net revenues. Consolidated net revenues decreased 0.9% on a reported basis and 0.4% on a constant-currency basis compared to the first six months of 2023. Net revenues were essentially flat, as growth in our DTC business globally was offset by a decline in wholesale.

Current wording

•Net revenues. Consolidated net revenues decreased 0.5% on a reported basis and increased 0.4% on a constant-currency basis compared to the first nine months of 2023. Net revenues were essentially flat, as growth in our DTC business globally was offset by a decline in wholesale.

Previous wording

•Operating income. Compared to the first six months of 2023, operating income decreased 87.1% to $21.5 million from $167.3 million due to the recognition of $171.3 million in restructuring charges in the current year as well as higher SG&A expenses, partially offset by higher gross profit. As a result, operating margin was 0.7%, 480 basis points lower than the first six months of 2023.

Current wording

•Operating income. Compared to the first nine months of 2023, operating income decreased 74.4% to $51.8 million from $202.1 million due to the recognition of $174.7 million in restructuring charges in the current year as well as higher SG&A expenses, partially offset by an increase in gross profit driven by higher gross margin. As a result, operating margin was 1.1%, 340 basis points lower than the first nine months of 2023.

Previous wording

•Net income. Compared to the first six months of 2023, consolidated net income decreased to $7.3 million from $113.1 million, primarily driven by the decreased operating income described above, offset by lower income taxes in the current year.

Current wording

•Net income. Compared to the first nine months of 2023, consolidated net income decreased to $28.0 million from $122.7 million, primarily driven by the decreased operating income described above, partially offset by a pension settlement loss in the prior year and lower income taxes in the current year.

Previous wording

•Adjusted EBIT. Compared to the first six months of 2023, Adjusted EBIT increased 5.0% to $227.7 million from $216.8 million, primarily due to higher gross profit in the current year partially offset by higher Adjusted SG&A expenses. Adjusted EBIT margin was 7.6%, 40 basis points higher than the first six months of 2023 on a reported basis and 50 basis points higher on a constant-currency basis.

Current wording

•Adjusted EBIT. Compared to the first nine months of 2023, Adjusted EBIT increased 13.7% to $403.1 million from $354.6 million, primarily due to higher gross profit in the current year partially offset by higher Adjusted SG&A expenses. Adjusted EBIT margin was 8.9%, 110 basis points higher than the first nine months of 2023 on a reported basis and 120 basis points higher on a constant-currency basis.

Previous wording

•Adjusted net income. Compared to the first six months of 2023, Adjusted net income increased 12.5% to $168.7 million from $150.0 million, primarily due to higher Adjusted EBIT described above, as well as lower interest expense and lower income taxes.

Current wording

•Adjusted net income. Compared to the first nine months of 2023, Adjusted net income increased 14.7% to $300.6 million from $262.0 million, primarily due to higher Adjusted EBIT described above, as well as lower income taxes and lower interest expense.

Previous wording

•Diluted earnings per share. Compared to the first six months of 2023, diluted earnings per share decreased to $0.02 from $0.28, mainly due to the lower net income described above.

Current wording

•Diluted earnings per share. Compared to the first nine months of 2023, diluted earnings per share decreased to $0.07 from $0.31, mainly due to the lower net income described above.

Previous wording

•Adjusted diluted earnings per share. Compared to the second quarter of 2023, Adjusted diluted earnings per share increased to $0.16 from $0.04, mainly due to the higher Adjusted net income described above. Currency translation unfavorably affected Adjusted diluted earnings per share by $0.01.

Current wording

•Adjusted diluted earnings per share. Compared to the first nine months of 2023, Adjusted diluted earnings per share increased to $0.75 from $0.65, due to the higher Adjusted net income described above. Currency translation unfavorably affected Adjusted diluted earnings per share by $0.01.

Previous wording

Fiscal year. We use a 52- or 53- week fiscal year, with each fiscal year ending on the Sunday that is closest to November 30 of that year. Certain of our foreign subsidiaries have fiscal years ending November 30. Each fiscal year generally consists of four 13-week quarters, with each quarter ending on the Sunday that is closest to the last day of the last month of that quarter. Each quarter of fiscal years 2024 and 2023 consists of 13 weeks, except for the fourth quarter of 2024, which will consist of 14 weeks and end of December 1, 2024.

Current wording

Fiscal year. We use a 52- or 53- week fiscal year, with each fiscal year ending on the Sunday that is closest to November 30 of that year. Certain of our foreign subsidiaries have fiscal years ending November 30. Each fiscal year generally consists of four 13-week quarters, with each quarter ending on the Sunday that is closest to the last day of the last month of that quarter. Each quarter of fiscal years 2024 and 2023 consists of 13 weeks, except for the fourth quarter of 2024, which will consist of 14 weeks and end on December 1, 2024.

Previous wording

Segments. Our Levi’s Brands business, which includes Levi’s®, Signature by Levi Strauss & Co.™ and Denizen® brands, is defined by geographical regions into three segments: Americas, Europe and Asia. Our Dockers® and Beyond Yoga® businesses are managed separately and separately do not meet the quantitative thresholds of a reportable segment and are reported in our financial statements under the caption of “Other Brands.” Effective in the second quarter of 2024, Dockers® and Beyond Yoga® businesses are disclosed as separate lines under the caption “Other Brands” to increase transparency of performance.

Current wording

Segments. Our Levi’s Brands business, which includes Levi’s®, Levi Strauss Signature™ and Denizen® brands, is defined by geographical regions into three segments: Americas, Europe and Asia. Our Dockers® and Beyond Yoga® businesses are managed separately and separately do not meet the quantitative thresholds of a reportable segment and are reported in our financial statements under the caption of “Other Brands.” Effective in the second quarter of 2024, Dockers® and Beyond Yoga® businesses are disclosed as separate lines under the caption “Other Brands” to increase transparency of performance.

Previous wording

•We reflect substantially all distribution costs in SG&A, including costs related to receiving and inspection at distribution centers, warehousing, shipping to our customers, handling and certain other activities associated with our distribution network.

Current wording

•We reflect substantially all distribution costs in SG&A, for both our DTC and wholesale channels, including costs related to receiving and inspection at distribution centers, warehousing, shipping to our customers, handling and certain other activities associated with our distribution network.

Previous wording

The following table presents, for the periods indicated, our consolidated statements of operations, the changes in these items from period to period and these items expressed as a percentage of net revenues:

Current wording

The following table presents, for the periods indicated, our consolidated statements of income, the changes in these items from period to period and these items expressed as a percentage of net revenues:

Previous wording

Total net revenues on both a reported and constant-currency basis increased for the three-month period ended May 26, 2024 and decreased for the six-month period ended May 26, 2024, as compared to the same periods in 2023.

Current wording

Total net revenues on a reported basis increased for the three-month period ended August 25, 2024 and decreased for the nine-month period ended August 25, 2024, as compared to the same periods in 2023. On a constant-currency basis, total net revenues increased for both the three-month and nine-month periods ended August 25, 2024, as compared to the same periods in 2023.

Previous wording

Excluding the effects of currency, net revenues increased for the three-month period ended May 26, 2024, driven by the wholesale channel revenue, as well as growth in our DTC channel. Wholesale channel revenue increased primarily as a result of the prior year quarter being negatively impacted by lower shipments as a result of the U.S. ERP implementation in the second quarter of 2023. Additionally, the exit of the Denizen business contributed $12 million to the decline, partially offsetting the wholesale revenue channel increase.

Current wording

Excluding the effects of currency, net revenues increased for the three-month period ended August 25, 2024, driven by growth in our DTC channel, largely offset by a decrease in wholesale channel revenue primarily as a result of lower volume in our Signature brand. Additionally, the exit of the Denizen business contributed $15 million to the decline.

Previous wording

The increase in DTC revenue for the three-month period ended May 26, 2024 was across all markets, led by the U.S. as a result of higher units sold. Revenue growth was driven by both store expansion, as we benefited from 57 more company-operated stores in operation in the Americas as of May 26, 2024, as compared to May 28, 2023, as well as store performance. E-commerce net revenues increased primarily due to higher online traffic and conversion.

Current wording

The increase in DTC revenue was attributable to growth across all markets, led by the U.S., for the three-month period ended August 25, 2024. Revenue growth was driven by both store performance and store expansion, as we benefited from 49 more company-operated stores in operation in the Americas as of August 25, 2024, as compared to August 27, 2023. E-commerce net revenues increased primarily due to higher online traffic and conversion.

Previous wording

Net revenues increased for the six-month period ended May 26, 2024, as growth in our DTC channel was partially offset with a decline in wholesale channel revenue. The growth in DTC revenue was due to strong performance and increased traffic within our company-operated stores as well as store expansion. E-commerce revenue increased due to higher online traffic and conversion. The decrease in wholesale channel revenue was impacted by the exit of our Denizen business of $26 million.

Current wording

Net revenues increased for the nine-month period ended August 25, 2024, as growth in our DTC channel was largely offset by a decline in wholesale channel revenue. The growth in DTC revenue was due to strong performance and increased traffic within our company-operated stores as well as store expansion. E-commerce revenue increased due to higher online traffic and conversion. The decrease in wholesale channel revenue was impacted by the exit of our Denizen business of $41 million.

Previous wording

Excluding the effects of currency, the growth in our DTC channel was primarily driven by expansion. There were 10 more company-operated stores in operation in Europe as of May 26, 2024 as compared to May 28, 2023.

Current wording

Excluding the effects of currency, for the three-month period ended August 25, 2024, compared to the prior year quarter, the increase in revenue was driven by higher volume in both our DTC channel, primarily due to expansion, and in our wholesale channel. There were 10 more company-operated stores in operation in Europe as of August 25, 2024 as compared to August 27, 2023.

Previous wording

For the six-month period ended May 26, 2024, the decrease in wholesale channel revenue was primarily driven by a decrease in orders as wholesale customers continued to rebalance inventory levels as well as the exit from Russia, which included wholesale channel revenues of approximately $8 million in the prior year. The growth in DTC revenue was primarily driven by expansion, partially offset by the exit from Russia, which included DTC channel revenues of approximately $5 million in the prior year.

Current wording

For the nine-month period ended August 25, 2024, the decrease in wholesale channel revenue was primarily driven by lower volumes as well as the exit from Russia, which included wholesale channel revenues of approximately $8 million in the prior year. The growth in DTC revenue was primarily driven by expansion, partially offset by the exit from Russia, which included DTC channel revenues of approximately $5 million in the prior year.

Previous wording

Asia. Net revenues in Asia decreased on a reported basis and increased on a constant-currency basis for the three-month and six-month periods ended May 26, 2024, with currency affecting net revenues unfavorably by approximately $16 million and $30 million, respectively. Excluding the effects of currency, net revenues for the three-month and six-month periods ended May 26, 2024 grew across both our DTC and wholesale channels.

Current wording

Asia. On a reported basis, net revenues in Asia increased for the three-month period ended August 25, 2024 and decreased for the nine-month period ended August 25, 2024. On a constant-currency basis, net revenues increased for both the three-month and nine-month periods ended August 25, 2024, with currency affecting net revenues unfavorably by approximately $8 million and $38 million, respectively.

Previous wording

The growth in DTC revenue was due to strong performance in our company-operated stores and e-commerce, as a result of increased volume driven by higher traffic. Additionally, we benefited from 12 more company-operated stores in operation in Asia as of May 26, 2024 as compared to May 28, 2023. The increase in wholesale revenue was primarily due to an increase in units sold in our franchise channel.

Current wording

The growth in DTC revenue was due to strong performance in our company-operated stores and e-commerce, as a result of increased volume driven by store expansion and higher average selling prices in company-operated stores and e-commerce, along with higher e-commerce traffic. Additionally, we benefited from 22 more company-operated stores in operation in Asia as of August 25, 2024 as compared to August 27, 2023. The increase in wholesale revenue was primarily due to an increase in units sold in our franchise channel.

Previous wording

Dockers. Net revenues in Dockers increased on a reported and constant-currency basis for the three-month period ended May 26, 2024 and decreased on a reported and constant-currency basis for the six-month period ended May 26, 2024. Currency translation did not have a significant impact. Excluding the effects of currency, net revenues for the three-month period ended May 26, 2024 grew primarily due to the U.S. wholesale channel, which in the prior year quarter included decreased shipments as a result of our U.S. ERP implementation. The decrease for the six-month period ended May 26, 2024 was primarily due to lower volume in the U.S. wholesale channel, partially offset by expansion in our DTC channel.

Current wording

•Dockers. Net revenues in Dockers decreased on a reported and constant-currency basis for the three-month and nine-month periods ended August 25, 2024, with currency affecting net revenues unfavorably by approximately $2 million for both the three-month and nine-month periods ended August 25, 2024. Excluding the effects of currency, net revenues decreased for the three-month and nine-month periods ended August 25, 2024 primarily due to lower volume in the U.S. wholesale channel, partially offset by expansion in our DTC channel in the nine month period.

Previous wording

Beyond Yoga®. Net revenues in Beyond Yoga® increased on a reported and constant-currency basis for the three-month and six-month periods ended May 26, 2024. Currency translation did not have an impact. Net revenues grew across both our DTC and wholesale channels. The growth in our DTC channel was primarily due to growth in e-commerce as well as store expansion. The growth in our wholesale channel was primarily due to higher volume.

Current wording

•Beyond Yoga®. Net revenues in Beyond Yoga® increased on a reported and constant-currency basis for the three-month and nine-month periods ended August 25, 2024. Currency translation did not have an impact on net revenues. Net revenues grew across both our DTC and wholesale channels. The growth in our DTC channel was primarily due to growth in e-commerce as well as store expansion. The growth in our wholesale channel was primarily due to higher volume.

Previous wording

The increase for the three-month period ended May 26, 2024 was driven by the comparative prior year quarter’s impact of the U.S. ERP implementation, with an impact of approximately 13% or $100 million, with the majority of the impact affecting our U.S. Levi’s brand. The impact of the exit of the Denizen brand, which contributed approximately $12 million to the decline in wholesale net revenues, respectively. The decrease for the six-month period ended May 26, 2024 was driven primarily by lower volume. Additionally, the impact of the exit of the Denizen brand and Russia business contributed $26 million and $8 million to the decline, respectively.

Current wording

Wholesale. On both a reported and constant-currency basis, net revenues in our wholesale channel decreased for the three-month and nine-month periods ended August 25, 2024, with currency translation affecting net revenues unfavorably by approximately $13 million and $11 million, respectively. The decreases in both periods were driven by lower volume, primarily in the U.S. The impact of the exit of the Denizen brand contributed approximately $15 million and $41 million to the decline in wholesale net revenues for the three-month and nine-month periods ended August 25, 2024, respectively. Additionally, the impact of the exit of the Russia business contributed $8 million to the decline for the nine-month period ended August 25, 2024.

Previous wording

DTC (Direct to Consumer). Net revenues in our DTC channel increased on both a reported and constant-currency basis for the three-month and six-month periods ended May 26, 2024, with currency translation affecting net revenues unfavorably by approximately $13 million and $17 million, respectively. The increase was driven by store performance across brick-and-mortar mainline and outlet stores, as well as e-commerce. Our U.S. DTC business for the three-month and six-month periods grew 12% and 11%, respectively. For the three-month and six-month periods ended May 26, 2024 net revenues from e-commerce grew 19% and 16%% on a reported basis and 19% and 15% on a constant-currency basis compared to the second quarter of 2023, driven by growth across the Levi’s and Beyond Yoga brands. As a percentage of second quarter net revenues for three-month and six-month periods, DTC comprised 47% and 48% of total net revenues, respectively.

Current wording

DTC (Direct to Consumer). Net revenues in our DTC channel increased on both a reported and constant-currency basis for the three-month and nine-month periods ended August 25, 2024, with currency translation affecting net revenues unfavorably by approximately $12 million and $29 million, respectively. The increase was driven by store performance across brick-and-mortar mainline and outlet stores, as well as e-commerce. Our U.S. DTC business for the three-month and nine-month periods grew 12% and 11%, respectively. For both the three-month and nine-month periods ended August 25, 2024 net revenues from e-commerce grew 16%, driven by growth across the Levi’s and Beyond Yoga® brands. As a percentage of net revenues for the three-month and nine-month periods ended August 25, 2024, DTC comprised 44% and 46% of total net revenues, respectively.

Previous wording

Currency translation impacted gross profit unfavorably by approximately $10 million and $12 million, respectively, for the three-month and six-month periods ended May 26, 2024.

Current wording

Currency translation impacted gross profit unfavorably by approximately $13 million and $25 million, respectively, for the three-month and nine-month periods ended August 25, 2024.

Previous wording

For the three-month and six-month periods ended May 26, 2024, the increase in gross margin was primarily driven by lower product costs and favorable product mix. Currency exchange, including transaction impacts, unfavorably impacted gross margin by approximately 140 basis points and 100 basis points for the three-month and six-month periods ended May 26, 2024, respectively.

Current wording

For the three-month and nine-month periods ended August 25, 2024, the increase in gross margin was primarily driven by lower product costs and favorable channel and brand mix. Gross margin increased 50 basis points as a result of lower discounted sales for the three-month period ended August 25, 2024. Currency exchange, including transaction impacts, unfavorably impacted gross margin by approximately 30 basis points and 80 basis points for the three-month and nine-month periods ended August 25, 2024, respectively.

Previous wording

Currency translation impacted SG&A favorably by approximately $7 million and $8 million for the three-month and six-month periods ended May 26, 2024, respectively.

Current wording

Currency translation impacted SG&A favorably by approximately $8 million and $16 million for the three-month and nine-month periods ended August 25, 2024, respectively.