LEVI Levi Strauss & Co - 10-K

Item 1A.

RISK FACTORS

Investing in our Class A common stock involves a high degree of risk. You should consider and carefully read all of the risks and uncertainties described below, as well as other information included in this Annual Report and in our other public filings. The risks described below are not the only ones facing us. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could materially and adversely affect our business, financial condition or results of operations. In such case, the trading price of our Class A common stock could decline, and you may lose all or part of your original investment. This Annual Report also contains forward-looking statements and estimates that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below.

Risks Relating to Macroeconomic Conditions and Our Industry

Global economic conditions have had, and will likely continue to have, an adverse effect on our business, operating results and financial condition.

Global economic conditions have impacted, and will likely continue to impact, businesses around the world, including ours. Macroeconomic pressures, including inflation, container shipping disruptions, fluctuations in foreign currency exchange rates, changes in trade policies, and competition for and price volatility of resources created a complex and challenging environment for us in fiscal year 2025 and may continue to impact us in the future. We continue to pursue ways to mitigate these pressures; however, if we are unable to fully mitigate the pressures, our revenue, operating margins and net income will be impacted in fiscal year 2026.

In addition, the following factors attributable to uncertain or deteriorating economic and financial market conditions could have a material adverse effect on our business, operating results and financial condition:

• Our sales are impacted by discretionary spending by consumers. Declines in consumer spending have resulted and in the future may result in reduced demand for our products, increased inventories, reduced orders from retailers for our products, order cancellations, lower revenues, higher discounts, pricing pressure and lower gross margins.

• We may be unable to access financing in the credit and capital markets at reasonable rates.

• We conduct transactions in various currencies, which creates exposure to fluctuations in foreign currency exchange rates relative to the U.S. Dollar. Volatility in the markets and exchange rates for foreign currencies and contracts in foreign currencies has had and may in the future have a significant impact on our reported operating results and financial condition.

• Continued volatility in the availability and prices for commodities and raw materials we use in our products and in our supply chain (such as cotton) could have a material adverse effect on our costs, gross margins and profitability.

• The current domestic and international political environment, including volatile trade relations, conflicts in multiple locations, and the related disruption to shipping lanes and civil unrest have resulted in uncertainty surrounding the future state of the global economy. There is uncertainty with respect to potential further changes in trade policy and regulations, sanctions and export controls, which increase volatility in the global economy and foreign currency exchange rates. This environment has affected and may continue to affect production and distribution lead times, increasing our costs and potentially affecting our ability to meet customer demand. If these disruptions persist, they may require us to modify our current sourcing practices, which may impact our product costs, and, if not mitigated, could have a material adverse effect on our business and results of operations.

• Trade policies and regulations, such as new, increased, or continuing uncertainty concerning tariffs or other trade restrictions may also increase the costs for imported materials and finished goods. Any resulting increase in prices we charge for our goods could negatively impact demand for our products, our sales and results of operations. Further, increases in consumer expenses more generally, may reduce discretionary spending and heighten price sensitivity, which could similarly negatively impact the demand for our products, our sales, and results of operations.

• If retailers of our products experience declining revenues or have trouble obtaining financing in the capital and credit markets to purchase our products, this could result in reduced orders for our products, order cancellations, late retailer payments, extended payment terms, higher accounts receivable, reduced cash flows, greater expense associated with collection efforts and increased bad debt expense. In addition, if retailers of our products experience severe financial difficulty, some may become insolvent and cease business operations, which could negatively impact our sales and results of operations. If contract manufacturers of our products or other participants in our supply chain experience difficulty obtaining financing in the capital and credit markets to purchase raw materials or to finance capital

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equipment and other general working capital needs, it may result in delays or non-delivery of shipments of our products.

In uncertain economic environments, we cannot predict whether or when such circumstances may improve or worsen, or what impact, if any, such circumstances could have on our business, results of operations, cash flows and financial position.

We are a global company with significant revenues and earnings generated internationally, which exposes us to the impact of foreign currency fluctuations, as well as political and economic risks.

A significant portion of our revenues and earnings are generated internationally. In addition, a substantial amount of our products comes from sources outside the country of distribution. As a result, we are both directly and indirectly (through our suppliers) subject to the risks of doing business outside the United States, including:

• currency fluctuations, which have impacted our results of operations significantly in prior years;

• political, economic and social instability;

• changes in trade and tax policies, laws and regulations;

• inflationary pressures;

• regulatory restrictions on our ability to operate in our preferred manner;

• rapidly changing regulatory restrictions and requirements, including in the areas of data privacy and security, artificial intelligence, sustainability and responses to climate change, which could result in regulatory uncertainty as well as potential significant increases in compliance costs; and

• less protective foreign laws relating to intellectual property.

Global conditions and events, such as the ongoing wars in multiple locations across the globe, as well as economic sanctions and other measures imposed in response thereto, have caused and continue to cause disruption, instability and volatility in global markets.

The functional currency for most of our foreign operations is the applicable local currency. As a result, fluctuations in foreign currency exchange rates affect the results of our operations and the value of our foreign assets and liabilities, including debt, which in turn may adversely affect results of operations and cash flows and the comparability of period-to-period results of operations. Changes in foreign currency exchange rates also affect the relative prices at which we and competitors sell products in the same market. Foreign governmental policies and actions regarding currency valuation could result in actions by the United States and other countries to offset the effects of such fluctuations. The unpredictability and volatility of foreign currency exchange rates have adversely impacted our businesses and financial results in the past and ongoing or unusual volatility may continue to adversely impact us.

Furthermore, due to our global operations, we are subject to numerous domestic and foreign laws and regulations affecting our business, such as those related to labor, employment, worker health and safety, antitrust and competition, environmental protection, consumer protection, privacy, and anti-corruption, including but not limited to the Foreign Corrupt Practices Act (the “FCPA”) and the U.K. Bribery Act. We have put into place policies and procedures for our employees, contractors, and agents aimed at ensuring legal and regulatory compliance. Violations of these regulations could subject us to criminal or civil enforcement actions, any of which could have an adverse effect on our business.

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We may be adversely affected by the financial health of our customers.

We extend credit to our customers based on an assessment of a customer’s financial condition, generally without requiring collateral. We also offer certain customers the opportunity to place orders ahead of delivery, which have in the past and may in the future be canceled upon certain conditions, and the risk of cancellation may increase when dealing with financially unstable retailers or retailers struggling with economic uncertainty. In the past, some customers have experienced financial difficulties up to and including bankruptcies, which have had an adverse effect on our sales, our ability to collect on receivables and our financial condition. When the retail economy weakens or as consumer behavior shifts, retailers may be more cautious with orders. A slowing or changing economy in our key markets could adversely affect the financial health of our customers, which in turn could have an adverse effect on our results of operations and financial condition. In addition, product sales are dependent in part on high quality merchandising and an appealing retail environment to attract consumers, which requires continuing investments by retailers. Retailers that experience financial difficulties may fail to make such investments or delay them, resulting in lower sales and orders for our products. The ongoing financial uncertainty, particularly for retailers, could also have an effect on our sales, our ability to collect on receivables and our financial condition.

Extreme weather conditions and natural disasters could negatively impact our operating results and financial condition.

Extreme weather conditions in the areas in which our retail stores, suppliers, manufacturers, customers, distribution centers, offices, headquarters, and vendors are located could adversely affect our operating results and financial condition. Moreover, natural disasters such as earthquakes, hurricanes, wildfires and tsunamis, whether occurring in the United States or abroad, and their related consequences and effects, including energy shortages and public health issues, have in the past temporarily disrupted, and could in the future disrupt, our operations, the shipping channels we use, the operations of and the shipping channels used by our vendors, manufacturers and other suppliers of raw materials and other goods. Such events have in the past resulted in, and in the future could result in, economic instability that may negatively impact our operating results and financial condition, including due to resulting increases in costs. In particular, if a natural disaster or severe weather event were to occur in an area in which we or our suppliers, manufacturers, customers, distribution centers or vendors are located, our business could be negatively affected. The impact would depend, in part, on the safety and availability of the relevant personnel and facilities, as well as the proper functioning of our or third parties’ disaster relief operations, including computer, network, telecommunication and other systems and operations. In addition, a natural disaster or severe weather event could negatively impact retail traffic to our stores or stores that carry our products or wholesale or DTC fulfillment and could have an adverse impact on consumer spending, any of which could in turn result in negative point-of-sale trends for our merchandise. Natural disasters or severe weather events in regions that produce key raw materials or other inputs for our products, may drive up the prices of those raw materials or constrain the availability of raw materials, adversely affecting our cost of goods. Further, climate change may increase both the frequency and severity of extreme weather conditions and natural disasters, which may affect our business operations, either in a particular region or globally, and the shipping channels we use, as well as the activities of and the shipping channels used by our third-party vendors and other suppliers, manufacturers, and customers. We could incur significant capital expenditures and other costs to improve the climate-related resiliency of our infrastructure and otherwise prepare for, respond to and mitigate the effects of climate change or regulatory mandates related thereto. In addition, the physical changes prompted by climate change could result in changes in consumer preferences, production capabilities, the productivity of our contract manufacturers, higher insurance premiums and deductibles and the availability of raw materials and costs, which could in turn affect our business, operating results, and financial condition.

If we were to experience a local or regional disaster, including near our California global headquarters, or other business continuity event or concurrent events, we could experience operational challenges, depending upon how a local or regional event may affect our human capital across our operations or regarding particular aspects of our operations, such as key executive officers or personnel. Further, if we are unable to find alternative suppliers or shipping channels, replace capacity at key manufacturing or distribution locations or quickly repair damage to our information technology systems and networks, including the Internet and third-party services, or supply systems, we could be late in delivering, or be unable to deliver, products to our customers. These events could result in reputational damage, lost sales, cancellation charges or markdowns, all of which could have an adverse effect on our business, results of operations and financial condition.

Public health crises and a future outbreak of a highly infectious or contagious disease, pandemic or epidemic have had and could in the future have an adverse effect on our business and results of operations.

Pandemics, such as COVID-19, pose a risk to our business and financial performance, including our ability to execute our near-term and long-term business strategies and initiatives in the expected time frame. The extent of the impact of a pandemic or other health crisis on our business will depend on several factors, including the duration, spread and severity of the pandemic or health crisis, which are uncertain and cannot be predicted, and on the requirements to take action to help limit the spread of the illness and the availability, widespread distribution and acceptance of vaccines and treatments for the pandemic.

A significant outbreak or resurgence of global or regional health events, and attendant responses by governments, private sector actors and individual consumers, could contribute to a recession, depression, or global economic downturn, reduce store

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traffic and consumer spending, result in temporary or permanent closures of retail locations, offices, distribution centers and factories, and could negatively impact the flow of goods. As with the COVID-19 pandemic, such events could cause health officials to impose guidance, mandates, or recommendations which may result in temporary closures and limited working hours of retail locations, restrictions on physical store capacity, minimum physical distancing requirements, and other workforce disruptions. In addition, a global or regional health event could adversely impact our supply chain if the factories that manufacture our products, the distribution centers where we manage our inventory, or the operations of our logistics and other service providers are disrupted, temporarily closed, or experience worker shortages. A global pandemic could also negatively impact our brand by reducing consumer willingness to visit stores, malls, and lifestyle centers, and employee willingness to staff our stores and return to office, and may also cause long-term changes to logistics and supply chain, healthcare costs, workforce productivity, and consumer shopping behavior, preferences, and demand for our products, all of which may have a material adverse effect on our business.

Risks Relating to Our Business and Operations

Our success depends on our ability to maintain the value and reputation of our brands.

Our success depends in large part on the value, overall health and reputation of our brands, which are integral to our business and the implementation of our “Brand Led” strategy for expanding our business. Maintaining, promoting and positioning our brands will depend largely on the success of our marketing, design and merchandising efforts and our ability to provide consistent, high-quality products supported by engaging marketing campaigns and adapting to rapidly changing media environments, including our increasing reliance on social media and digital dissemination of advertising campaigns. Our brands and reputation could be adversely affected if we fail to achieve these objectives, if we fail to deliver high-quality products acceptable to our customers and consumers or if we face or mishandle a product recall.

Our brand value also depends on our ability to maintain a positive consumer perception of our brands, corporate integrity and culture. Negative claims or publicity involving us or our products, our cobranding or collaboration partners, the production methods, materials or locations of any of our suppliers or contract manufacturers, consumer data or any of our key employees, endorsers or suppliers could seriously damage our reputation, sales and brand image, regardless of whether such claims or publicity are accurate. Social media, which accelerates and potentially amplifies the scope of negative claims or publicity, can increase the challenges of responding to negative claims or publicity. In addition, the Company, the Levi Strauss Foundation, our senior executives and the descendants of the family of our founder, Levi Strauss, may from time to time take positions or actions (including internal programs) or make statements on or charitable donations to social issues, including donations to the Levi Strauss Foundation (which is not one of our consolidated entities), that may be unpopular with some consumers or customers, which may result in adverse publicity or impact our ability to attract or retain such consumers or customers, and which could adversely impact our results in certain locations. In addition, actions taken or statements made by recipients of such charitable donations could also seriously harm our brand image with consumers. Any harm to our brands and reputation could adversely affect our business and financial condition. Additionally, people or groups who oppose these positions or statements may cause disruptions to our business operations. Adverse publicity, regardless of its accuracy, could undermine consumer confidence in our brands and reduce long-term demand for our products.

The appeal of our brands may also depend on the success of our corporate sustainability initiatives, which require company-wide coordination and alignment on managing related risks and costs and may ultimately not be successful. Risks related to our corporate sustainability initiatives include increased public focus, including by governmental and nongovernmental organizations, on these and other environmental sustainability matters, including packaging and waste, animal welfare and land use. Moreover, because of the increased focus from our stakeholders, including consumers, employees and investors, and more recently regulatory organizations, on corporate sustainability practices, there is an increased risk of negative public reaction to, public backlash against and increased pressure on disclosure related to our initiatives, products or practices related to corporate sustainability or social issues that could have an adverse impact on our image, reputation, business operations and financial results. Risks also include increased pressure and regulatory requirements to expand our disclosures in these areas, make commitments, set targets or establish additional goals and take actions to meet them, which could expose us to business, legal, market, reputational, operational and execution costs or risks. The metrics we disclose, such as emissions and water usage, whether they be based on the standards we set for ourselves or those set by others, may influence our reputation and the value of our brand. In addition, as we work to align with the recommendations and requirements of various ratings and disclosure organizations and new and evolving regulations, we will likely expand our disclosures in these areas and, as a result, we may face increased scrutiny related to our sustainability activities. Our failure to achieve progress on our metrics on a timely basis, or at all, could adversely affect our business, financial performance and growth. We could damage our reputation and the value of our brand if we fail to act responsibly in the areas in which we report. Any harm to our reputation resulting from setting these metrics, expanding our disclosure or our failure or perceived failure to meet such metrics or disclosures could adversely affect our business, financial performance and growth.

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We rely on third parties to drive traffic to our platform, and these providers may change their algorithms or pricing, or may be subject to new laws and regulations, in ways that could negatively affect our business, financial condition, cash flows, and results of operations.

Our success depends on our ability to attract customers cost effectively. With respect to our marketing channels, we rely heavily on relationships with providers of online services, search engines, social media and other websites and e-commerce businesses to provide content, advertising banners and other links that direct customers to our websites. We also use social media, including Facebook, Instagram, YouTube and others, as well as affiliate marketing, email, SMS, and direct mail, as part of our multi-channel approach to marketing and we expect that our use of social media for marketing purposes will increase over time. We rely on these relationships to provide significant traffic to our website and as important marketing channels and sources of information regarding potential customers. If digital platforms change or penalize us with their algorithms, terms of service, display and featuring of search results, or if competition increases for advertisements, we may be unable to cost-effectively attract customers. Our relationships with digital platforms are not covered by long-term contractual agreements and do not require any specific performance commitments. In addition, many of the platforms and agencies with whom we have advertising arrangements provide advertising services to other companies, including retailers with whom we compete. As competition for online advertising has increased, the cost for some of these services has also increased. A significant increase in the cost of the marketing providers upon which we rely could adversely impact our ability to attract customers cost effectively and harm our business, financial condition, results of operations and prospects. In addition, laws and regulations governing the use of these platforms and other digital marketing channels are rapidly evolving. It may become more difficult for us or our partners to comply with such laws, and future data privacy laws and regulations or industry standards, as well as related enforcement, may restrict or limit our ability to use some or all of the marketing strategies on which we currently rely. The failure by us, our employees or third parties acting at our direction to abide by applicable laws and regulations in the use of these platforms could adversely impact our reputation or subject us to fines or other penalties.

Failure to continue to obtain or maintain high-quality endorsers of our products, or actions taken by our endorsers, could harm our business.

We establish relationships with artists, designers, musicians, athletes and other public figures to develop, evaluate and promote our products. If we are unable to recruit endorsers with consumer appeal or endorsers were to stop using our products contrary to their endorsement agreements, our business could be adversely affected. In addition, actions taken, allegations of wrongdoing or statements made by our endorsers, associated with our products or brand or otherwise, that harm the reputations of those endorsers or our decisions to cease collaborating with certain endorsers in light of actions taken, allegations of wrongdoing or statements made by them, could also seriously harm our brand image with consumers and, as a result, could have an adverse effect on our business.

The success of our business depends upon our ability to forecast and respond timely to consumer demand and market conditions and offer on-trend and new and updated products at attractive price points.

The global apparel industry is characterized by ever-changing fashion trends and consumer preferences, including the increasing shift to digital brand engagement and social media communication, and by the rapid replication of new products by competitors. The apparel industry is also impacted by changing consumer preferences regarding spending categories generally, including shifts away from traditional consumer spending and towards "experiential" spending and sustainable products. As a result, our success depends in large part on our ability to efficiently and effectively develop, market and deliver innovative and stylish products at a pace, intensity and price competitive with other brands in the markets in which we sell our products while reducing costs associated with the related processes. In addition, we must create products at a range of price points that appeal to the consumers of both our wholesale customers and our dedicated retail stores and e-commerce sites situated in each of our diverse geographic regions. Our development and production cycles take place prior to full visibility into all of these factors for the coming seasons. Failure on our part to forecast and respond timely to consumer demand and market conditions and to regularly and rapidly develop innovative and stylish products and update core products could limit sales growth, adversely affect retail and consumer acceptance of our products and negatively impact the consumer traffic in our dedicated retail stores. Moreover, our newer products may not produce as high a gross margin as our traditional products and thus may have an adverse effect on our overall margins and profitability.

In addition, if we fail to accurately forecast consumer demand, we may experience excess inventory levels, which may result in inventory write-downs and the sale of excess inventory at discounted prices. This could have an adverse effect on the image and reputation of our brands and could adversely affect our gross margins. For example, if sales do not meet expectations because of unexpected effects on inventory supply and consumer demand, too much inventory may cause excessive markdowns and, therefore, lower-than-planned margins. Conversely, if we underestimate consumer demand for our products, we may

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experience inventory shortages, which could delay shipments to customers, negatively impact retailer and consumer relationships and diminish brand reputation and loyalty.

Port congestion, inventory delays, labor shortages, and storage and process capacity pressures have impacted our ability to service consumer and wholesale customer demand and could impact it again in the future. Uneven flow of receipts and shipments has caused and may continue to cause capacity pressures within our distribution centers and result in higher costs and limit our ability to fulfill our consumers’ and wholesale customers’ demand on a timely basis or at all. In the event these supply chain disruptions reoccur, our business, operating results and financial condition may be adversely affected.

We depend on a group of key wholesale customers for a significant portion of our revenues. A significant adverse change in a customer relationship or in a customer’s performance or financial position could harm our business and financial condition.

Sales to our top ten wholesale customers accounted for 24%, 25% and 27% of our total net revenues in fiscal years 2025, 2024 and 2023, respectively. No single customer represented 10% or more of our net revenues in any of these years. While we have long-standing relationships with our wholesale customers, we do not have long-term contracts with them. As a result, purchases generally occur on an order-by-order basis, and the relationship, as well as particular orders, can generally be terminated by either party at any time. If any major wholesale customer decreases or ceases its purchases from us, cancels its orders, delays or defaults on its payment obligations to us, reduces the floor space, assortments, fixtures or advertising for our products or changes its manner of doing business with us for any reason, such as due to store closures, decreased foot traffic, inflationary pressures or recession, such actions are expected to adversely affect our business and financial condition. In addition, competition between our wholesale customers may impact the prices at which they sell our products, thereby impacting the prices at which they are willing to buy products from us. Furthermore, certain of our major wholesale customers may seek to distribute our products globally in a manner or at prices that are different from our regular or promotional guidelines or impact the positioning that we seek to promote in our other channels of distribution.

A decline in the performance or financial condition of a major wholesale customer—including bankruptcy or liquidation—could result in the adverse impact on revenues and cause us to limit or discontinue business with that customer, require us to assume more credit risk relating to our receivables from that customer or limit our ability to collect amounts related to previous purchases by that customer. Permanent store closures and other developments in these proceedings have adversely affected our sales to these customers. The foregoing may have an adverse effect on our business and financial condition.

Our efforts to expand our retail business may not be successful, which could impact our operating results.

We may not be able to implement important strategic initiatives in accordance with our expectations or that generate expected returns, which may result in an adverse impact on our business and financial results. One of our key strategic priorities is our “DTC First” strategy, which includes our plan to become a leading world-class omni-channel retailer by expanding our consumer reach in brand-dedicated stores globally, including making selective investments in company-operated stores and e-commerce sites, and other brand-dedicated store models. In many locations, we face major, established retail competitors that may be able to better attract consumers and execute their retail strategies. In addition, a retail operating model involves substantial ongoing investments in property, equipment, information systems, inventory and personnel. Due to the high fixed-cost structure associated with these investments, a decline in sales or the closure of or poor performance of stores, including as a result of general declines in the macroeconomic environment, could result in significant costs and impacts to our margins and impairment charges. Our ability to grow our retail channel also depends on the availability and cost of real estate that meets our criteria for foot traffic, square footage, demographics and other factors. Failure to identify and secure adequate new locations, or failure to effectively manage the profitability of the fleet of stores, could have an adverse effect on our results of operations. Our DTC First strategy depends on our ability to successfully drive expansion of our gross margins, manage and leverage our cost structure and drive return on our investments. If we cannot effectively execute our strategy while managing costs effectively, our business could be negatively impacted and we may not achieve our expected results of operations.

In addition, our investments in consumer, digital, and omni-channel shopping initiatives may not deliver the results we anticipate. These initiatives involve significant investments in IT systems, data science and artificial intelligence initiatives, and significant operational changes. Our competitors are also investing in omni-channel initiatives, some of which may be more successful than our initiatives. If the implementation of our consumer, digital and omni-channel initiatives is not successful, or we do not realize the return on our investments in these initiatives that we anticipate, our operating results would be adversely affected.

Additionally, prioritizing these efforts over other organizational needs or misallocating resources could adversely impact our business and operating results.

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If the technology-based systems that give our consumers the ability to shop or interact with us online do not function effectively, our operating results, as well as our ability to grow our digital commerce business globally or to retain our customer base, could be materially adversely affected.

Many of our consumers shop with us through our digital platforms or through third party digital marketplaces on which we operate. Consumer expectations and related competitive pressures have increased and are expected to continue to increase relative to various aspects of our e-commerce business, including speed of product delivery, shipping charges, return privileges and other evolving expectations. Increasingly, consumers are using mobile-based devices and applications to shop online with us and with our competitors, and to do comparison shopping, as well as to engage with us and our competitors through digital services and experiences that are offered on mobile platforms. We are increasingly using social media and proprietary mobile applications to interact with our consumers and as a means to enhance their shopping experience. In addition, customers are increasingly using AI shopping assistant tools to help find products, compare prices and make purchase decisions. Use of these AI tools could transform commerce, including in ways that we fail to anticipate, and affect our ability to efficiently attract potential customers to our digital platforms and retain our customer base. Any failure on our part or on the part of our third-party providers to provide attractive, effective, reliable, secure, user-friendly digital commerce platforms that offer a wide assortment of merchandise with rapid delivery options and that continually meet the changing expectations of online shoppers or any failure to provide attractive digital experiences to our customers could place us at a competitive disadvantage, result in the loss of digital commerce and other sales, harm our reputation with consumers, have an adverse impact on the growth of our digital commerce business globally and have an adverse impact on our business and results of operations. In addition, as use of our digital platforms continues to grow, we will need an increasing amount of technical infrastructure to continue to satisfy our consumers’ needs. If we fail to continue to effectively scale and adapt our digital platforms to accommodate increased consumer demand, our business may be subject to interruptions, delays or failures and consumer demand for our products and digital experiences could decline. Risks specific to our digital commerce business also include diversion of sales from our and our retailers’ brick and mortar stores, difficulty in recreating the in-store experience through direct channels and liability for online content and data, including liability resulting from failure to comply with certain online platform legal or regulatory requirements. Our failure to successfully respond to these risks could adversely affect sales in our digital commerce business, as well as damage our reputation and brands. We are also subject to a variety of laws and regulations that govern the operations and features of our platforms. These include, but are not limited to, laws and regulations imposing specific requirements on consumer opt-outs, notices and mandates for verification of age of minors. The costs of monitoring and responding to such regulations and the consequences of non-compliance could have an adverse effect on our operations or financial condition.

We may be unable to maintain or increase our sales through our third-party distribution channels.

In addition to our brand-dedicated company-operated retail stores and e-commerce sites, our third-party distribution channels include department stores, specialty retailers, mass channel retailers, franchised or other brand-dedicated stores, and shop-in-shops.

We may be unable to maintain or increase sales of our products through these distribution channels for several reasons, including the following:

• the retailers in these channels maintain—and seek to grow—substantial private-label and exclusive offerings as they strive to differentiate the brands and products they offer from those of their competitors;

• the retailers change their apparel strategies in a way that shifts focus away from our typical consumer or that otherwise results in a reduction of sales of our products generally, such as a reduction of fixture spaces devoted to our products or a shift to other brands;

• other channels, including vertically-integrated specialty stores and e-commerce sites, account for a substantial portion of jeanswear and casual wear sales. In some of our mature markets, these stores and sites have placed competitive pressure on our primary distribution channels, and many of these stores and sites are now looking to our developing markets to grow their business; and

• shrinking points of distribution, including fewer doors at our customer locations, store closures and decreased foot traffic due to, among other things, or bankruptcy or financial difficulties of a customer.

Further success by retailer private-labels, vertically-integrated specialty stores and e-commerce sites may continue to adversely affect the sales of our products across all channels, as well as the profitability of our brand-dedicated stores. Additionally, our ability to secure or maintain retail floor space, product display prominence, market share and sales in these channels depends on our ability to offer differentiated products, to increase retailer profitability on our products and the strength of our brands, and such efforts could have an adverse impact on our margins.

In addition, the retail industry in the United States has experienced substantial consolidation over the last decade, and further consolidation may occur. Consolidation in the retail industry has typically resulted in store closures, centralized purchasing decisions and increased emphasis by retailers on inventory management and productivity, which could result in

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fewer stores carrying our products or reduced demand by retailers for our products. In addition, we and other suppliers may experience increased customer leverage over us and greater exposure to credit risk as a result of industry consolidation. Furthermore, consolidation may be partly due to consumers continuing to transition away from traditional wholesale retailers to large online retailers, which in turn exposes our products to increased competition and pricing pressure. Any of the foregoing results can impact, and have adversely impacted in the past, our net revenues, margins and ability to operate efficiently.

If we encounter problems with distribution and the operation of company-owned or third-party distribution facilities, our ability to deliver our products to market could be adversely affected.

We rely on both company-owned and third-party distribution facilities to warehouse and ship products to our wholesale customers, retail stores and e-commerce consumers throughout the world. As part of our continued pursuit for improved organizational agility and marketplace responsiveness, we have consolidated the number of distribution facilities we rely upon and continue to look for opportunities for further consolidation in certain regions. These actions may make our operations more vulnerable to interruptions in the event of work stoppages or disruption, labor disputes, such as labor strikes or boycotts, worker shortages, port congestion, pandemics, macroeconomic conditions, geopolitical conflict, the impacts of climate change, earthquakes, floods, fires or other natural disasters affecting these distribution centers or shipping channels. Labor laws in the various jurisdictions where our distribution network operates and inflation impacts on labor costs impact our costs of distribution and increase regulatory complexity for us and the third-parties with whom we partner. In addition, distribution capacity is dependent on proper operating technology and the timely performance of services by third parties, including the transportation of products to and from their distribution facilities, which also may be adversely affected by similar events. Any failure by us or our third-party providers to adapt to these events or to otherwise respond adequately to our distribution needs could disrupt our business.

Our distribution system includes computer-controlled and automated equipment, which may be subject to a number of risks related to data and system security or computer viruses, the proper operation of software and hardware, power interruptions or other system failures. Moreover, some of our current distribution centers rely on aging technology, which in some cases is no longer supported and may inhibit our efficiency as well as increase the likelihood of system interruption or failure.

As part of our ongoing effort to optimize our logistics network, we are continuing to transition the operation of certain of our global distribution and fulfillment centers from owner-operated facilities to third-party logistics providers. This transition has caused, and may continue to cause, interruptions to our business systems and delays in order fulfillment as we transition our systems and technology and restructure our workforce arrangements. We have experienced and may continue at times to experience delays in the adoption or remediation of necessary technology, shortages of labor and capacity constraints and shortfalls. Our lack of system redundancies and inability to efficiently move inventory demands from one distribution center to another, together with our reliance on third-party logistics providers to satisfy a significant percentage of our global distribution and fulfillment needs means we are subject to concentration risks. Any further disruptions, delays, or performance issues at company-owned or third-party distribution facilities could materially affect our ability to timely fulfill orders and manage inventory. If we continue to encounter such problems with our distribution system, our ability to meet customer and consumer expectations, manage inventory, complete sales and achieve operating efficiencies could be further adversely affected.

Unexpected obstacles in new markets and in our existing markets may limit our expansion opportunities and cause our business and growth to suffer.

Our future growth depends in part on our continued expansion efforts in existing markets and in new markets where we may have limited familiarity and experience with regulatory environments and market practices. In particular, one of our key strategies is to further diversify our portfolio and grow market share across geographies, categories, genders and channels. We may not be able to expand or successfully operate in those markets, categories and channels as a result of unfamiliarity or other unexpected barriers to expansion or entry, such as new competitors, cultural and linguistic differences, differences in regulatory environments, labor practices and market practices, economic or governmental instability, difficulties in keeping abreast of market, business and technical developments and differences in consumer tastes and preferences. Our failure to develop our business in new markets or disappointing growth in existing markets that we may experience could harm our business and results of operations.

We may not be able to realize the potential financial or strategic benefits of the transactions we complete, or find suitable target businesses to acquire.

From time to time, we have acquired and may in the future acquire or invest in businesses or partnerships that we believe could complement our business or offer growth opportunities. We expect to make additional acquisitions and strategic investments in the future, but we may not find suitable acquisition or investment targets, or we may not be able to consummate desired acquisitions or investments due to among other things, financial constraints, unfavorable credit markets, commercially unacceptable terms, failure to obtain regulatory approvals, competitive bid dynamics or other risks, which could harm our operating results. Additionally, acquisitions may not be well received by the customers or employees of either company, and

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this could hurt our brand and result in the loss of key employees. Acquisitions and strategic investments involve numerous risks, including the diversion of our management’s attention from other business concerns, the possibility that current operating and financial systems and controls may be inadequate to deal with our growth and the potential loss of key employees. We also may encounter difficulties in integrating any businesses we may acquire with our existing operations. The success of these transactions depends on our ability to successfully merge corporate cultures, operations, and financial systems; realize cost reduction synergies; and, as necessary, retain key personnel of acquired companies. In addition, acquisitions and investments may not perform as expected or cause us to assume unrecognized or underestimated liabilities. These activities are complex, costly and time-consuming and pose a number of risks. Any delays or issues encountered in these activities could have an adverse effect on the financial condition of the company.

We may in the future divest certain product lines that no longer fit our long-term strategies. As previously disclosed, we entered into a definitive agreement to sell our Dockers ® business. On July 31, 2025, we sold the Dockers ® intellectual property and operations in the U.S. and Canada. The sale of the Dockers ® Andes, Malaysia and Turkey operations is expected to close on or around January 30, 2026 with the sale of the Europe and Mexico operations expected to close on or around February 27, 2026. Divestitures, including of the Dockers ® business, may adversely impact our business, operating results and financial condition if we are unable to achieve the anticipated benefits or cost savings from such divestitures, or if we are unable to offset impacts from the loss of revenue associated with the divested product lines. Further, whether such divestitures are ultimately consummated or not, their pendency could have a number of negative effects on our current business, including increased costs and expenses and potentially disrupting our regular operations, increasing our near-term costs, diverting the attention of our workforce and management team and increasing undesired workforce turnover. It could also disrupt existing business relationships, make it harder to develop new business relationships, or otherwise negatively impact the way that we operate our business.

If we do not manage the foregoing risks, the transactions that we complete or are unable to complete may harm our brand and adversely affect our business, financial condition, and results of operations.

We face risks arising from the restructuring of our operations and uncertainty with respect to our ability to achieve any anticipated cost savings associated with such restructuring.

In the first quarter of fiscal year 2024, we began implementing a multi-year global productivity initiative and restructuring plan, “Project Fuel,” designed to accelerate the execution of our Brand Led and DTC First strategies while fueling long-term profitable growth, with a focus on optimizing our operating model and structure, how we go to market, redesigning business processes and identifying opportunities to reduce costs and simplify processes across our organization. This restructuring plan is substantially complete as of November 30, 2025, although certain aspects, including the transition of operations of certain of our global distribution and fulfillment centers to third-party logistics providers, remain ongoing.

We have in the past and may in the future undertake restructuring initiatives, which have resulted, and may continue to result, in the incurrence of significant additional costs, and our ability to achieve the anticipated cost savings and other benefits from these actions is subject to many estimates and assumptions, which are subject to uncertainties. Risks to successful and timely implementation of these restructuring initiatives include the incurrence of additional costs in the short-term, including workforce reduction costs, costs associated with transitioning functions and processes to new locations, charges for inventory and technology-related write-offs and charges relating to consolidation of excess facilities; failure to accurately assess market opportunities and the technology required to address such opportunities; failure to accurately predict the time and resources necessary to implement our restructuring plan and related go-to-market strategy; actual or perceived disruption to customers, suppliers, distribution networks and other important operational relationships and the inability to resolve potential issues in a timely manner; difficulties transitioning functions and processes to new locations; difficulties transitioning the operation of certain of our global distribution and fulfillment centers to third-party logistics providers including in start up delays and timely delivery of products of acceptable quality; and failure to maintain employee morale, damage to company culture and an increase in employment claims. Because of these and other factors, some of which may not be entirely within our control, we may not fully realize the purpose and anticipated operational benefits, efficiencies or cost savings of any productivity actions in the expected timelines, or at all, and, if we do not, our business and results of operations may be adversely affected. Additionally, prioritizing these efforts over other organizational needs or misallocating resources could adversely impact our business and operating results.

Our business is affected by seasonality and other factors that result in fluctuations in our quarterly operating results.

We experience moderate fluctuations in aggregate sales volume during the year. Historically, revenues in our fourth fiscal quarter have slightly exceeded those in our other three fiscal quarters. In addition, our customers and consumers may cancel orders, change delivery schedules, or change the mix of products ordered with minimal notice. As a result, we may not be able to accurately predict our quarterly sales. Accordingly, our results of operations are likely to fluctuate significantly from period to period. These factors, along with other factors that are beyond our control, such as social or political unrest, pandemics, general economic conditions, changes in consumer preferences, weather conditions, the effects of climate change, the

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availability of import quotas, transportation disruptions and foreign currency exchange rate fluctuations, could adversely affect our business and cause our quarterly results of operations to fluctuate.

We rely significantly on information technology and data to operate our business, including our supply chain and retail operations, and any delay or problem with operating or upgrading that technology or data, or those third parties upon which we rely, could cause a disruption to our business and adversely affect our financial results.

We are heavily dependent on information technology systems and networks, including the Internet, third-party services and artificial intelligence, across our supply chain, including product design, production, forecasting, ordering, manufacturing, transportation, marketing, sales (including digital commerce), and distribution, as well as for processing financial information for external and internal reporting purposes, legal, tax and regulatory requirements, retail operations and other business activities. These information technology systems are critical to many of our operating activities and our business processes and may be negatively impacted worldwide by any security incident, service interruption or shutdown.

Over the last several years, we have been implementing and continue to implement modifications and upgrades to our systems, including making changes to legacy systems, replacing legacy systems with successor systems with new functionality, automating processes and acquiring new systems with new functionality. For example, over the next few years, we plan to continue the process of implementing a new ERP system across the company with implementation in the United States completed in 2023 and Europe scheduled to commence in fiscal year 2026. While we are investing significantly in developments to our technology and systems, there is a risk that our investments may ultimately not result in the rate of return we expect. Additionally, we are in the process of transitioning certain of our global distribution and fulfillment facilities to third-party providers. Our ability to effectively manage and maintain our inventory and to ship products to customers on a timely basis, either directly or through our third-party providers, depends significantly on the reliability of their and our technology systems, and we cannot assure that implementing these modifications and upgrades will in the future prevent or protect against all technological problems and security issues or bring about the desired efficiencies and synergies to our operations.

We also use information technology systems to process financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal and tax requirements. If these systems suffer severe damage, disruption or shutdown and our incident response or business continuity plans, or those of our vendors, do not effectively resolve the issues in a timely manner, we could experience delays in reporting our financial results, which could result in lost revenues and profits, as well as reputational damage. Furthermore, we depend on information technology systems and personal information collection for digital marketing, digital commerce, consumer engagement and the marketing and use of our digital products and services. We also rely on our ability to engage in electronic communications throughout the world between and among our employees as well as with other third parties, including customers, suppliers, vendors and consumers. Any interruption in information technology systems may impede our ability to engage in the digital space and result in lost revenues, damage to our reputation and loss of users.

The failure of our information technology systems and networks to operate effectively or remain innovative, our inability to keep up with rapid technological change (including the successful utilization of data analytics, artificial intelligence and machine learning), third-party software-induced interruptions to our operations and problems with transitioning to upgraded or replacement systems could cause delays in product fulfillment and reduced efficiency of our operations, require significant capital investments, and may have an adverse effect on our reputation, results of operations and financial condition. In addition, the increased use of employee-owned devices for communications, as well as work-from-home arrangements, present additional operational risks to our information technology systems.

Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages or claims related to our data privacy and security obligations or our use of third-party artificial intelligence. We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all or that such coverage will pay future claims. The successful assertion of one or more large claims against us that exceeds available insurance coverage or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could adversely affect our business, reputation, results of operations and financial condition.

We may be subject to security breaches or other confidential data theft from our systems, which can lead to adverse consequences, including but not limited to regulatory investigations or actions, litigation, fines and penalties, harm to our ability to effectively operate our business, claims that we breached our data privacy or security obligations, harm to our reputation and a loss of customers or sales.

In the ordinary course of our business, we may collect, store, use, transmit, disclose or otherwise process proprietary confidential and sensitive data, including personal information, intellectual property, and trade secrets, and we rely upon third parties (such as service providers) for data processing-related activities. We also rely on third parties for the operation of certain

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of our e-commerce websites, and do not control these service providers. As a result, we and the third parties upon which we rely face a variety of evolving threats, including but not limited to ransomware attacks, security breaches, cyber-attacks or other malicious activities by hackers, criminal groups, nation-states and nation-state-sponsored organizations and social-activist organizations, computer viruses or other malicious codes, unauthorized access, phishing attacks, or unauthorized uses, any of which may be irreversible and result in operational problems and security incidents. Given the nature of information collected and processed, the retail industry in particular has been the target of many cyber-attacks, and it is possible that an individual or group could defeat our security measures, or those of a third-party service provider. We have been and will continue to be a target of cyber-attacks, including phishing, and other attempts to breach, or gain unauthorized access to, our systems because of the visibility of our brand, making the secure maintenance of proprietary, confidential and sensitive data critical to our business and reputation. In the future, we may see an increase in the number of such attacks as we have shifted to a hybrid working model under which some employees will continue working remotely and accessing our technology infrastructure remotely.

Our work to integrate, secure and enhance these systems and related processes in our global operations is ongoing and we will continue to invest in these efforts. We may expend significant resources or modify our business activities to try to protect against security incidents. We cannot provide assurance, however, that the measures we take to secure and enhance these systems will be sufficient to prevent security incidents, cyber-attacks, system failures or data or information loss. Cyber-attacks, malicious internet-based activity and online and offline fraud are prevalent and continue to increase in frequency and magnitude. The techniques used to obtain unauthorized, improper or illegal access to our systems, our data or our customers’ data, to disable or degrade service or to sabotage systems, including through the use of artificial intelligence, are constantly evolving, have become increasingly complex and sophisticated, may be difficult to detect quickly and often are not recognized until launched against a target, even if we take all reasonable precautions, including to the extent required by law. In addition to traditional computer “hackers,” threat actors, personnel (such as through theft or misuse), sophisticated nation-states and nation-state supported actors and social-activist organizations now engage in attacks. Furthermore, our efforts to address undesirable activity on our platforms may also increase the risk of retaliatory attack.

We have and may continue to be subject to a variety of evolving threats, including but not limited to social engineering, such as phishing, malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing, personnel misconduct or error, supply-chain attacks, software bugs, server malfunctions and large-scale, complex automated attacks that can evade detection for long periods of time. Future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies. Ransomware attacks, including those perpetrated by organized criminal threat actors, nation-states and nation-state supported actors and social-activist organizations, are becoming increasingly prevalent and severe and can lead to significant interruptions in our operations, loss of data and income, reputational harm and diversion of funds. In addition, such incidents could result in unauthorized disclosure and misuse of material confidential information, including personal information. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments or beliefs that payment may not result in system restoration.

In addition to our own systems, we use third-party service providers to store, transmit and otherwise process information on our behalf, and our third-party service providers are subject to similar cybersecurity risks. Due to applicable laws and regulations or contractual obligations, we may be held responsible for any cybersecurity incident attributed to our service providers as they relate to the information we share with them or to which they are granted access. Although we generally contractually require these service providers to implement and maintain a standard of security (such as implementing reasonable measures) as well as incident response commitments, we cannot control third parties and cannot guarantee that a security breach will not occur in their systems or that we will receive timely information should an incident occur.

Our software or information technology systems, or that of third parties upon whom we rely to operate our business, may have material vulnerabilities and, despite our efforts to identify and remediate these vulnerabilities, our efforts may not be successful or we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities. Actual or perceived vulnerabilities or unauthorized access of our or our service providers’ information technology systems or networks may result in the loss of confidential business and financial data, misappropriation of our consumers’, users’ or employees’ personal information or a disruption of our business. Any of these outcomes could have a material adverse effect on our business, including unwanted media attention, impairment of our consumer and customer relationships, damage to our reputation, and the value of our brands, resulting in lost sales, fines, lawsuits (including class actions), government enforcement actions (for example, investigations, fines, penalties, audits and inspections) or significant legal and remediation expenses. We also may need to expend significant resources to protect against, respond to or redress problems caused by any unauthorized processing.

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As we outsource functions, we become more dependent on the entities performing those functions. Disruptions or delays at our third-party service providers could adversely impact our operations.

As part of our long-term profitable growth strategy, we are continually looking for opportunities to provide essential business services in a more cost-effective manner. In some cases, this requires the outsourcing of functions or parts of functions that can be performed more effectively by external service providers. For example, we currently outsource a significant portion of our information technology, finance, customer relations and customer service functions to a third party. We are also in the process of transitioning the operation of certain of our global distribution and fulfillment centers to third-party logistics providers. While we believe we conduct appropriate diligence before entering into agreements with any outsourcing entity, the failure of one or more of such entities to meet our performance standards and expectations, including with respect to data security, compliance with data protection and privacy laws, use of artificial intelligence or related technologies, providing quality services on a timely basis or providing services at the prices we expect, may have an adverse effect on our results of operations or financial condition. We could face increased costs or disruption associated with finding replacement vendors or hiring new employees in order to return these services in-house, which may have a significant impact on our costs, as well as impact the timing of receipt of inventory for future seasons and the shipment of inventory to consumers and customers. Any failures of these vendors to properly deliver their services could similarly have a material effect on our business. We may outsource other functions in the future, which would increase our reliance on third parties.

We currently rely on contract manufacturing of our products. Our inability to secure production sources meeting our quality, cost, social and environmental risk mitigation and other requirements, or failures by our contract manufacturers to perform, could harm our sales, service levels and reputation.

In fiscal year 2025, we sourced nearly all of our products from independent contract manufacturers that purchase fabric and make our products and may also provide us with design and development services. As a result, we must locate and secure production capacity. We depend on contract manufacturers to maintain adequate financial resources, including access to sufficient credit, to secure a sufficient supply of raw materials, and maintain sufficient development and manufacturing capacity in an environment characterized by continuing cost pressure and demands for product innovation and speed-to-market. In addition, we currently do not have any material long-term contracts with any of our contract manufacturers. Under our current arrangements with our contract manufacturers, these manufacturers generally may unilaterally terminate their relationship with us at any time. While we work with numerous contract manufacturers globally, our production has become increasingly concentrated at the factory level within certain manufacturers. As a result, if any such factory experiences operational disruptions, shutdowns or delays, we could be adversely affected compared to our competitors to the extent a significant portion, or even all, of the product volume is contracted by us. In addition, consolidation among our contract manufacturers could further concentrate production or reduce available capacity. Reliance on a smaller number of factories or manufacturers exposes us to increased risk, and any difficulties or failures to perform by our contract manufacturers could cause delays in product shipments or otherwise adversely affect our results of operations.

If our contract manufacturers, or any raw material vendors or suppliers on which our contract manufacturers rely, suffer permanent or prolonged manufacturing or transportation disruptions, including due to macroeconomic conditions, regulatory restrictions, geopolitical conflict, public health conditions, natural disasters, shortages of single-source or other raw materials, or any other unforeseen events, our ability to source product on a timely basis could be adversely impacted, which could adversely affect our results of operations. Also, we have certain minimum inventory purchase commitments, including fabric commitments, with suppliers that secure a portion of material needs for future seasons. If we do not satisfy the minimum purchase commitments, due to conditions such as decreased demand, we may be charged for estimated adverse purchase commitments.

A contract manufacturer’s failure to ship products to us in a timely manner or to meet our quality standards, or interference with our ability to receive or process shipments due to factors such as port or transportation conditions, security incidents or storage and process capacity pressures, could cause us to miss the delivery date requirements of our customers. Failing to make timely deliveries may cause our customers to cancel orders, refuse to accept deliveries, impose non-compliance charges, demand reduced prices or reduce future orders, any of which could harm our sales and margins. If we need to replace any contract manufacturer, we may be unable to locate additional contract manufacturers on terms that are acceptable to us, or at all, or we may be unable to locate additional contract manufacturers with sufficient capacity to meet our requirements or to fill our orders in a timely manner.

We require contract manufacturers to make progress toward our sustainability goals and meet our standards and policies in terms of working conditions, environmental protection, raw materials, facility safety, security and other matters before we are willing to place business with them. As such, we may not be able to obtain the lowest-cost production. We also may need to move our production to the extent that we determine our contract manufacturers are not in compliance with our standards or applicable government standards, sanctions or other restrictions. We may also encounter delays in production and added costs as a result of the time it takes to train our contract manufacturers in our methods, products and quality control standards. In addition, the labor and business practices of apparel manufacturers and their suppliers, including raw material suppliers, have

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received increased attention from the media, non-governmental organizations, consumers and governmental agencies in recent years. Any failure by our contract manufacturers or their suppliers to adhere to our code of conduct, labor or other laws, appropriate labor or business practices, safety, structural or environmental standards, and the potential litigation, negative publicity and political pressure relating to any of these events or perceived failures, could harm our reputation and business.

Our suppliers may be impacted by economic conditions and cycles and changing laws and regulatory requirements which could impact their ability to do business with us or cause us to terminate our relationship with them and require us to find replacements, which we may have difficulty doing.

Our suppliers are subject to the fluctuations in general economic cycles, and global economic conditions may impact their ability to operate their businesses. They may also be impacted by the increasing costs or availability of raw materials, including related to inflationary pressures, labor and distribution, resulting in demands for less attractive contract terms or an inability for them to meet our requirements or conduct their own businesses. The performance and financial condition of a supplier and our relationship with that supplier may cause us to absorb costs, to alter our business terms, to incur costs to mitigate risks against and face regulatory challenges, to cease doing business with a particular supplier, or to change our sourcing practices generally, which could in turn adversely affect our business and financial condition.

In addition, regulatory developments such as reporting requirements on the use of “conflict” minerals mined from the Democratic Republic of Congo and adjoining countries, or compliance with sanctions and customs trade orders issued by the U.S. government related to raw materials, goods, entities and individuals connected to a region of China, as well as retaliatory measures or restrictions on critical materials by certain governments, could affect the sourcing and availability of raw materials used by our suppliers in the manufacturing of our products, or distribution of products to the United States. We have been and may continue to be subject to costs associated with these regulations, including for the diligence pertaining to these matters and the cost of remediation and other changes to products, processes, or sources of supply as a consequence of such verification activities. The impact of such regulations may result in a more limited pool of acceptable suppliers, and we cannot be assured that we will be able to obtain products in sufficient quantities or at competitive prices. Also, because our supply chain is complex, we may face regulatory challenges in complying with applicable sanctions and trade regulations, which can conflict with laws of other countries. Such compliance or non-compliance can raise reputational challenges with our consumers and other stakeholders for various reasons, including the inability to sufficiently verify the origins for the material used in the products we sell.

The global apparel industry is subject to intense competition and cost and pricing pressure.

The apparel industry is characterized by low barriers to entry for both suppliers and marketers, global sourcing through suppliers located throughout the world, trade liberalization, continuing movement of product sourcing to lower cost countries, regular promotional activity, and the ongoing emergence of new competitors with widely varying strategies and resources. These factors have contributed, and we expect them to continue to contribute in the future, to intense pricing pressure and uncertainty throughout the supply chain. Macroeconomic pressures around the world such as tariffs, inflation and recession fears are creating a complex and challenging retail environment for us and our customers as consumers reduce discretionary spending. Pricing pressure has been further exacerbated by the variability and availability of raw materials, combined with labor and cost inflation and uncertainty throughout the supply chain. This pressure could have adverse effects on our business and financial condition, including:

• reduced gross margins across our product lines and distribution channels;

• increased retailer demands for allowances, incentives, and other forms of economic support;

• unfavorable consumer reactions to price increases; and

• increased pressure on us to reduce our production costs and operating expenses.

In addition, we compete with other companies in the apparel industry on the basis of investments in technology and adapting to changes in technology, including the successful use of data analytics, artificial intelligence and machine learning.

Increases in the price or changes in the availability of raw materials could increase our cost of goods and negatively impact our financial results.

The majority of our products are made of cotton, where the remaining balance are primarily made of synthetics, cotton/synthetic blends and viscose. The prices we pay our suppliers for our products are dependent in part on the market price for raw materials used to produce them, primarily cotton. The price and availability of cotton may fluctuate substantially, depending on a variety of factors, including demand, acreage devoted to cotton crops and crop yields, climate change, weather, supply conditions, transportation costs, energy prices, work stoppages, government regulation, sanctions and policy, economic climates, market speculation, compliance with our working condition, environmental protection, other standards and other unpredictable factors. For example, compliance with the sanctions and trade orders issued by the United States, Europe and other governments related to raw materials, entities and individuals who are connected to a region of China, as well as

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retaliatory measures or restrictions of critical materials by certain governments, could affect the sourcing and availability of raw materials, including cotton, used by our suppliers in the manufacturing of certain of our products and the importation of products from China into the United States. Any and all of these factors may be exacerbated by global climate change. Cotton prices have fluctuated significantly over the past few years and we expect they will continue to experience variability and uncertainty. We do not currently hedge the price of cotton. In the event of a significant disruption or unavailability in the supply of the fabrics, synthetics or other raw materials used by our vendors in the manufacture of our products, our vendors might not be able to locate alternative suppliers of materials of comparable quality at an acceptable price. In addition, prices of purchased finished products also depend on wage rates and energy costs in the regions where our contract manufacturers are located, as well as freight costs from those regions that are in turn affected by crude oil prices. Increases in raw material costs, wage rates, energy costs and freight costs, unless sufficiently offset by our pricing actions, may cause a decrease in our profitability and negatively impact our sales volume. These factors may also have an adverse impact on our cash and working capital needs as well as those of our suppliers.

Our business is subject to risks associated with sourcing and manufacturing overseas, as well as risks associated with tariffs, transportation disruptions or a global trade war.

We import materials and finished garments into all of our operating regions. Our ability to import products in a timely and cost-effective manner may be affected by conditions at ports or issues that otherwise affect transportation and warehousing providers, such as port and shipping capacity, energy costs, labor disputes and work stoppages, political unrest, security incidents, severe weather or security requirements in the United States and other countries. These issues could delay importation of products or require us to locate alternative ports or warehousing providers to avoid disruption to our customers. These alternatives may not be available on short notice or could result in higher transportation costs, which could have an adverse impact on our business and financial condition, specifically our gross margin and overall profitability.

Substantially all of our import operations are subject to complex trade and customs laws, regulations and tax requirements. These laws, regulations, and requirements may include restrictions under applicable sanctions laws and export controls, as well as trade restrictions or tariffs set by governments through mutual agreements or unilateral actions. In addition, the countries in which our products are manufactured or imported may from time to time impose additional duties, tariffs or other trade restrictions on our imports or adversely modify existing restrictions. For example, the U.S. government recently imposed broad “reciprocal” tariffs of 10% or more on goods imported from most U.S. trading partners into the United States, resulting in increased costs of imported materials and inputs from many countries. Adverse changes in import costs and restrictions, including tariffs, or the failure by us or our suppliers to comply with trade regulations or similar laws, could harm our business. In this regard, the current and anticipated future trade policies in the United States and elsewhere have introduced greater uncertainty with respect to future tax and trade regulations. If additional tariffs or trade restrictions are implemented by the United States or other countries, such as retaliatory tariffs, the cost of our products manufactured globally and imported into the United States or other countries could increase, which in turn could adversely affect the demand for these products and have an adverse effect on our business and results of operations.

The loss of high-quality employees, including members of our executive management team and other key employees, or the failure to attract and retain key personnel or maintain our workplace culture could harm our business.

Our future success depends, in part, on the continued service of our high-quality employees, including our executive management team and other key employees, and the loss of the services of any key individual, or any negative perception with respect to these individuals, or our workplace culture or values, could harm our business. Our future success also depends, in part, on our ability to recruit, retain and motivate our employees sufficiently, both to maintain our current business and to execute our strategic initiatives. Competition for experienced and well-qualified employees in our industry is particularly intense in many of the places where we do business, and we may not be successful in attracting and retaining such personnel. Changes to our current and future office environments, adoption of new work models and our business requirements or expectations about when or how often employees work either on-site or remotely may not meet the expectations of our employees. As certain jobs and employers increasingly operate remotely, traditional geographic competition for talent may change in ways that cannot be fully predicted at this time. If our employment proposition is not perceived as favorable compared to other companies’ policies, it could negatively impact our ability to attract, hire and retain our employees. Moreover, shifts in U.S. immigration policy could negatively impact our ability to attract, hire and retain highly skilled employees who are from outside the United States. We believe that our corporate culture has been a key driver of our success. Any failure to preserve and evolve our culture could negatively affect our future success, including our ability to retain and recruit employees.

During the course of fiscal year 2025, we made changes in personnel, including some of our senior leaders. While we have confidence in our team, the uncertainty inherent in leadership transitions and restructuring may be difficult to manage and can disrupt our business. The failure to successfully transition and assimilate key employees generally could adversely affect

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our results of operations. To the extent we do not effectively hire, onboard, retain and motivate key employees, our business can be harmed.

Certain employees in our production and distribution facilities are covered by collective bargaining agreements, and any material job actions could negatively affect our results of operations.

In North America, certain of our and our vendors’ distribution employees are covered by various collective bargaining agreements. Outside North America, many of our and our vendors’ production and distribution employees are covered by either industry-sponsored or government-sponsored collective bargaining mechanisms. Any work stoppages or other job actions by these employees, including as a result of our efforts to transition certain distribution and fulfillment centers to third-party logistics providers, could harm our business and reputation.

Additionally, employees in various jurisdictions and countries in which we and our vendors operate are or may eventually become unionized, which could bring about changes to our culture and operating model, increased payroll costs and reduced flexibility under labor regulations, which in turn may negatively impact our business. Furthermore, we could be affected by conflicts between unions which claim representation of our employees that could generate additional payroll costs and labor conflicts. Our responses to any union organizing efforts could also impact how the company and brands are perceived by customers and employees.

We have substantial liabilities and cash requirements associated with our postretirement benefits, pension, and deferred compensation plans.

Our postretirement benefits, pension and deferred compensation plans result in substantial liabilities on our balance sheet. These plans and activities have generated, and will generate, substantial cash requirements for us, and these requirements may increase beyond our expectations in future years based on changing market conditions. The difference between plan obligations and assets, or the funded status of the plans, is a significant factor in determining the net periodic benefit costs of our pension plans and the ongoing funding requirements of those plans. Many variables, such as changes in interest rates, mortality rates, health care costs, investment returns or the market value of plan assets, can affect the funded status of our defined benefit pension and other postretirement, and postemployment benefit plans and cause volatility in the net periodic benefit cost and future funding requirements of the plans. Plan liabilities may impair our liquidity, have an unfavorable impact on our ability to obtain financing and place us at a competitive disadvantage compared to some of our competitors who do not have such liabilities and cash requirements. See Note 10 to our audited consolidated financial statements included in this report for more information regarding these obligations.

Our licensees and franchisees may not comply with our product quality, manufacturing standards, social, environmental, marketing and other requirements, which could negatively affect our reputation and business.

We license our trademarks to third parties for manufacturing, marketing and distribution of various products. While we enter into comprehensive agreements with our licensees covering product design, product quality, sourcing, manufacturing, marketing and other requirements, and while these agreements provide us with certain termination rights, our licensees may not comply fully with those agreements. Non-compliance could include marketing products under our brand names that do not meet our quality and other requirements or engaging in manufacturing practices that do not meet our sustainability standards and policies including our supplier code of conduct or applicable government restrictions and regulations. These activities could harm our brand equity, our reputation and our results of operations.

In addition, we enter into franchise agreements with unaffiliated franchisees to operate stores and, in certain circumstances, websites, in many countries around the world. Under these agreements, third parties operate, or will operate, stores and websites that sell apparel and related products under our brand names. While the agreements we have entered and plan to enter in the future provide us with certain termination rights, the value of our brands could be impaired to the extent that these third parties do not operate their businesses, including their stores or websites, in a manner consistent with our requirements regarding our brand identities and customer experience standards. Failure to protect the value of our brands, or any other harmful acts or omissions by a franchisee, could have an adverse effect on our brand equity, our reputation and our results of operations.

Our current and future products may experience quality problems from time to time that could result in negative publicity, litigation, product recalls and warranty claims, which could result in decreased revenues and harm to our brands.

There can be no assurance we will be able to detect, prevent or fix all defects that may affect our products. Inconsistency of legislation and regulations may also affect the costs of compliance with such laws and regulations. Such problems could hurt the image of our brands, which is critical to maintaining and expanding our business. Any negative publicity, product recalls or lawsuits filed against us related to the perceived quality or safety of our products could harm our brand, impact our results of operations and decrease demand for our products.

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Risks Related to Legal, Regulatory and Compliance Issues and Changes

We are subject to a complex array of laws and regulations and litigation and other legal and regulatory proceedings, which could have an adverse effect on our business, financial condition, and results of operations.

As a multinational corporation with operations and distribution channels throughout the world, we are subject to and must comply with extensive laws and regulations in the United States and other jurisdictions in which we have operations and distribution channels. If we or our employees, agents, suppliers and other partners fail or are alleged to have failed to comply with any of these laws or regulations, we could be subjected to regulatory investigations or enforcement, lawsuits (including class actions), fines, sanctions or other penalties that could negatively affect our reputation, business, financial condition and results of operations. Furthermore, laws, regulations and policies and the interpretation of such, can conflict among jurisdictions and compliance in one jurisdiction may result in legal or reputational risks in another jurisdiction. We are or may become involved in various types of claims, lawsuits (including class actions), regulatory proceedings and government investigations relating to our business, our products and the actions of our employees and representatives, including contractual and employment relationships, product liability, use of artificial intelligence and other machine learning technologies, antitrust, privacy and data protection, trademark and other intellectual property rights and a variety of other matters. It is not possible to predict with certainty the outcome of any such legal or regulatory proceedings or investigations, and we could in the future incur judgments, fines or penalties, or enter settlements of lawsuits and claims that could have a material adverse effect on our business, financial condition and results of operations and negatively impact our reputation. The global nature of our business means legal and compliance risks, such as anti-bribery, anti-corruption, fraud, trade, environmental, competition, privacy, and other regulatory matters, will continue to exist and additional legal proceedings and other contingencies will arise from time to time, which could adversely affect us. In addition, the adoption of new laws or regulations, or changes in the interpretation of existing laws or regulations, including the evolving regulatory requirements affecting product circularity and sustainability standards or disclosures, may result in significant unanticipated legal and reputational risks. Any current or future legal or regulatory proceedings could divert management’s attention from our operations and result in substantial legal fees.

Changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations may have an adverse effect on our reputation, business, financial condition and results of operations.

Changes in U.S. or international social, political, regulatory and economic conditions or in laws and policies governing trade, manufacturing, development and investment in the countries where we currently sell our products or conduct our business, could adversely affect our business, reputation, financial condition and results of operations. For example, we are required to observe certain laws relating to economic sanctions, including those implemented by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and other sanctions authorities. These requirements may prohibit or restrict activities relating to certain individuals, entities, countries or territories. Although we have implemented controls to promote compliance with economic sanctions, economic sanctions law may change rapidly, and it can be time-consuming for us to alter our business operations to adapt to or comply with any changes in these or other laws. Should our controls prove to be, or be found to have been, ineffective, we may be subject to regulatory or enforcement action that could adversely affect our reputation, financial condition, or business.

Changes or proposed changes in U.S. or other countries’ trade policies may result in restrictions and economic disincentives on international trade. Tariffs, economic sanctions and other changes in U.S. trade policy have in the past and could in the future trigger retaliatory actions by affected countries, and certain foreign governments have instituted or are considering imposing retaliatory measures on certain U.S. goods. Further, any emerging protectionist or nationalist trends (whether regulatory- or consumer-driven) either in the United States or in other countries could affect the trade environment. For example, the U.S. government recently imposed broad “reciprocal” tariffs of 10% or more on goods imported from most U.S. trading partners into the United States, which drew responses in the form of retaliatory tariffs from other countries. We, like other multinational corporations, conduct a significant amount of business that may be impacted by changes to the trade policies of the United States and foreign countries (including governmental action related to tariffs, international trade agreements, or economic sanctions). In the case of reciprocal and retaliatory tariffs, the imposition of such tariffs has adversely affected our costs of imported goods and materials. Any further such changes have the potential to adversely impact the U.S. economy or certain sectors thereof or the economy of other countries in which we conduct operations, our industry and the global demand for our products, and as a result, could have a material adverse effect on our business, financial condition and results of operations.

Failure to adequately protect or enforce our intellectual property rights or adequately ensure that we are not infringing the intellectual property rights of others could adversely affect our business.

We may face significant expenses and liability in connection with the protection of our intellectual property rights, including outside the United States, and if we are unable to successfully protect our rights or resolve conflicts relating to infringement of intellectual property rights with others, our business or financial condition may be adversely affected.

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Our competitive position largely depends upon our trademarks and other intellectual property rights, which we take steps to establish and protect both domestically and internationally. However, we may be unable to adequately protect or enforce our intellectual property rights or determine the extent of any unauthorized use by third parties, particularly in foreign countries where the laws do not protect proprietary rights as fully as in the United States. We periodically discover counterfeit reproductions of our products or products that otherwise infringe our intellectual property rights. Given that we place significant value on our trademarks, trade dress and the overall appearance and image of our products, if we are unsuccessful in enforcing or protecting our intellectual property rights, continued sales of these infringing products could adversely affect our sales and our brand and could result in a shift of consumer preference away from our brand and products. The actions we take to establish and protect our intellectual property rights are expensive, time-consuming and may not be adequate to prevent imitation of our products or other unauthorized uses of our intellectual property by others. Additionally, the laws and enforcement mechanisms to protect our intellectual property from unauthorized use in evolving technologies, like artificial intelligence, are developing and may be inadequate.

We also cannot assure that our rights in, or ownership of, our trademarks or other intellectual property rights would be upheld if challenged. Further, we cannot ensure that licensees will not take any actions that hurt the value of our intellectual property.

We also may be unable to prevent others from seeking to block sales of our products as purported violations of their proprietary rights.

We may be subject to liability or be prevented from using our trademarks or other intellectual property rights, which could have an adverse effect on our financial conditions and operations, if third parties successfully claim we infringe their intellectual property rights, including from the use of outputs generated using artificial intelligence technologies which may contain or be substantially similar to third-party content protected by intellectual property. Defending infringement claims could be expensive and time consuming and might result in our entering into costly license agreements or other settlement agreements. We also may be subject to significant damages or injunctions against development, manufacturing, use, importation or sale of certain products.

Although we take various actions to prevent the unauthorized use or disclosure of our confidential information and intellectual property rights, our controls and efforts to prevent unauthorized use or disclosure thereof might not always be effective. For example, confidential information related to business strategy, innovations, new technologies, mergers and acquisitions, unpublished financial results or personal data could be prematurely, inadvertently or improperly used or disclosed, including by an employee inputting confidential information into artificial intelligence or machine learning technologies, resulting in a loss of reputation, loss of intellectual property rights, a decline in our stock price or a negative impact on our market position, and could lead to damages, fines, penalties or injunctions.

New tax legislation, including legislation implementing changes in taxation of international business activities, could be enacted at any time and new interpretations or applied laws could increase our compliance, operating and other costs, all of which could adversely impact our financial position and results of operations.

We earn a substantial portion of our income in foreign countries and, as such, we are subject to the tax laws in the United States and in numerous foreign jurisdictions. Current economic and political conditions make tax laws and regulations, or their interpretation and application, in any jurisdiction subject to significant change.

Recent tax legislation and regulations, including provisions of the 2025 One Big Beautiful Bill Act (“OBBBA”) and potential increases in taxes, make significant changes to the U.S. tax regime and could materially impact how our earnings are taxed.

In addition, the Organization for Economic Cooperation and Development (“OECD”) reached agreement with over 140 countries to implement a minimum 15% tax rate on certain multinational enterprises, commonly referred to as the Pillar Two Inclusive Framework. Many jurisdictions continue to announce changes in their tax laws and regulations based on the Pillar Two Inclusive Framework. While we continue to evaluate the impact of these legislative changes as additional guidance becomes available, uncertainty remains regarding the timing and interpretation by tax authorities in affected jurisdictions. These legislative changes did not have a material impact in fiscal year 2025 but could have an adverse impact on our effective tax rate, tax liabilities, and cash tax in future years, beginning in 2026.

We utilize tax rulings and other agreements to obtain certainty in treatment of certain tax matters. These rulings and agreements expire from time to time and may be extended when certain conditions are met, or terminated if certain conditions are not met. We cannot guarantee that such rulings and agreements will be extended or all conditions will continue to be satisfied. Changes in these rulings and agreements or their termination may result in a loss of certainty in treatment, which may adversely impact our effective tax rate.

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We are also subject to the examination of our tax returns by the Internal Revenue Service (“IRS”) and state and local taxing authorities in the United States and by taxing authorities in other jurisdictions. The laws and regulations related to tax matters are extremely complex, require significant judgment and are subject to varying interpretations and application. Although we believe our positions are reasonable, they are subject to challenge and the results of audits or related disputes could have an adverse effect on our financial statements for the period or periods for which the applicable final determinations are made. For example, we and our subsidiaries are also engaged in a number of intercompany transactions across multiple tax jurisdictions. Although we believe we have clearly reflected the economics of these transactions and the proper local transfer pricing documentation is in place, tax authorities may propose and sustain adjustments that could result in changes that may impact our mix of earnings in countries with differing statutory tax rates.

Additionally, we regularly assess the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of our provision for income taxes. Although we believe our tax provisions are adequate, the final determination of tax audits and any related disputes could be materially different from our historical income tax provisions and accruals.

We are subject to stringent and changing obligations related to data privacy and security. Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm and other adverse business or financial consequences.

In addition to our own sensitive and proprietary business information, we handle transactional and personal information, including without limitation credit card information and personal information about our employees, customers, consumers and users of our digital experiences, which include online distribution channels and product engagement.

As a result of our data collection and processing activities, we must comply with increasingly complex and rigorous, and sometimes conflicting laws, regulatory standards, industry standards, external and internal privacy and security policies, contracts and other obligations that govern the processing of business and personal data, including personal health information of our employees. For example, the European Union’s General Data Protection Regulation (the “EU GDPR”), the United Kingdom’s GDPR (the “UK GDPR”), California’s Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 and its regulations (the “CCPA”) impose obligations on companies regarding the handling of personal data and provide certain individual privacy rights to persons whose data is stored or otherwise processed. Furthermore, other comprehensive privacy laws, such as China’s Personal Information Protection Law, Canada’s Personal Information Protection and Electronic Documents Act and India’s new Digital Personal Data Protection Act, as well as other states in the United States have enacted data privacy laws that have come into effect or will come into effect in the coming months and years, which are likely to continue to influence other jurisdictions, U.S. states or even the U.S. Congress to pass comparable legislation. Additionally, laws in certain jurisdictions require data localization and impose restrictions on the transfer of personal information across borders. For example, the EU GDPR and the UK GDPR generally restrict the transfer of personal information, including employee and consumer information, to countries outside of the EEA and the United Kingdom (respectively) without appropriate safeguards or other measures. If we cannot implement a valid compliance mechanism for cross-border privacy and security transfers, we may face increased exposure to legal or regulatory actions, substantial fines and injunctions against processing or transferring personal information from Europe or elsewhere.

In addition, privacy advocates and industry groups have proposed, and may propose in the future, standards with which we are legally or contractually bound to comply. For example, we are also subject to the Payment Card Industry Data Security Standard (“PCI DSS”). The PCI DSS requires companies to adopt certain measures to ensure the security of cardholder information, and noncompliance with PCI-DSS can result in penalties ranging from $5,000 to $100,000 per month by credit card companies, litigation, damage to our reputation and revenue losses. Furthermore, we are bound by contractual obligations related to privacy, data protection and data security, and our efforts to comply with such obligations may not be successful or may have other negative consequences.

We may publish privacy policies, marketing materials and other statements, such as compliance with certain certifications or self-regulatory principles, regarding data privacy and security. If these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences. In general, negative publicity we might receive regarding any actual or perceived violations of consumer privacy rights, including fines and enforcement actions against us or other similarly placed businesses, may also impair consumers’ trust in our privacy practices and make them reluctant to give their consent to share their data with us.

In addition, our use of online tracking technologies on our platform puts us and our advertising partners at risk of claims under the California Invasion of Privacy Act (“CIPA”) and similar surveillance laws and we have been and may continue to be subject to such claims. These cases typically concern allegations that the use of common third-party technology tools (such as online tracking technologies, cookies, and pixels) on a website constitute interceptions of confidential communications that allegedly constitute wiretapping, which can only be done with the consent of both parties to the communication. CIPA has been a subject of increasing litigation, particularly in the form of class actions. If such suits continue to be brought against us,

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defending against them in court or in arbitration could substantially increase our legal costs, potential liability, and involve members of our legal teams to assist in defending these claims. Obligations related to data privacy and security are quickly changing, becoming increasingly stringent and creating regulatory uncertainty. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions. Compliance with existing and forthcoming data privacy and security laws and regulations can be costly and time consuming, and may require changes to our information technologies, systems and practices and to those of any third parties that process personal information on our behalf and cause us to divert resources from other initiatives and projects to address these evolving compliance and operational requirements. If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with obligations related to data privacy and security, we could face significant consequences, including, but not limited to, proceedings against the company by governmental entities (for example, investigations, lawsuits (including class actions), fines, penalties, audits and inspections) or other entities or individuals, additional reporting requirements or oversight bans, damage to our reputation and credibility or inability to process data or operate in certain jurisdictions, any of which could have a negative impact on our business, operations, reputation, revenues and profits.

Use of artificial intelligence technologies by us and our service providers could subject us to stringent and changing obligations. Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm and other adverse business or financial consequences.

The use of rapidly evolving technologies such as artificial intelligence technologies, by us and our third-party service providers, while presenting significant benefits, can also present risks and challenges to our business. Using artificial intelligence and other machine learning technologies while the technology is still developing may expose us to liability, reputational harm, and threats of litigation, particularly if such technology produces errors or hallucinations, or results in content that is biased, harmful discriminatory, or that infringes the intellectual property or data privacy rights of third parties, or otherwise if such technology does not function as intended. Moreover, with the use of certain artificial intelligence and other machine learning technologies, including those licensed from third parties, there may be a lack of transparency of the sources of data used to train or develop such technologies or how inputs are converted to outputs, and we may not be able to fully validate this process and its accuracy.

Use of artificial intelligence and other machine learning technologies, by us or our service providers, in connection with the creation or development of intellectual property may present challenges in asserting ownership over the resulting output, which may not be eligible for copyright or patent protection under various laws (including those of the United States) without sufficient human authorship or inventorship, respectively. Further, there is a risk that the data inputted into such technologies may contain confidential information, including trade secrets, resulting in such information becoming accessible by third parties. The use of artificial intelligence, including potential inadvertent disclosure of confidential information or personal data, could also lead to legal and regulatory investigations and enforcement actions, or may give rise to specific obligations, including required notices, consents and opt-outs, under various data privacy, protection and cybersecurity laws and regulations in a number of jurisdictions.

The use of artificial intelligence or machine learning technologies by our third-party service providers in their business activities, whether or not known to use, could also expose us to risks. While we believe we conduct appropriate diligence prior to onboarding third-party service providers, the failure of one or more such service provider to meet our expectations, including by use of artificial intelligence tools in contravention of agreements with us, inputting our confidential or proprietary information into artificial intelligence tools, or roll-out of new artificial intelligence tools without approval, may have an adverse effect on our operations or financial condition, result in legal or regulatory violations, jeopardize our intellectual property rights or give rise to issues pertaining to data privacy and data protection.

The increasing adoption of artificial intelligence technologies has led data protection authorities around the world to consider and adopt new and evolving interpretations of data protection laws. Such laws and regulations focused on the use and provision of artificial intelligence technologies may impose certain obligations on us (e.g., obligations regarding processing of personal data, including required notices, consents and opt-outs) and could result in monetary penalties or other regulatory actions. Moreover, the costs of monitoring and responding to such regulations and the consequences of non-compliance could have an adverse effect on our operations or financial condition. The growing deployment and use of artificial intelligence and machine learning technologies will require that we develop and maintain controls to address the risks to our business and operations. Our failure, or perceived failure, to comply fully with developing interpretations of artificial intelligence or machine learning technologies laws and regulations, or meet evolving and varied stakeholder expectations and industry standards, or our inability to develop adequate controls to manage our use of artificial intelligence and machine learning technologies could harm our business, reputation, financial condition, and operating results.

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Failure to comply with anti-bribery, anti-corruption and anti-money laundering laws could subject us to penalties and other adverse consequences.

We are subject to the FCPA, the U.K. Bribery Act and other anti-bribery, anti-corruption and anti-money laundering laws in various jurisdictions around the world. The FCPA, the U.K. Bribery Act and similar applicable laws generally prohibit companies, as well as their officers, directors, employees and third-party intermediaries, business partners and agents from making improper payments or providing other improper things of value to government officials or other persons. We and our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state owned or affiliated entities and other third parties where we may be held liable for corrupt or other illegal activities, even if we do not explicitly authorize them. While we have policies and procedures and internal controls to address compliance with such laws, we cannot provide assurance that all of our employees and third-party intermediaries, business partners and agents have not and will not take actions in violation of such policies and laws, for which we may be ultimately held responsible. In the event that we believe or have reason to believe that our directors, officers, employees or third-party intermediaries, agents or business partners have or may have violated such laws, we may be required to investigate or to have outside counsel investigate the relevant facts and circumstances. Detecting, investigating and resolving actual or alleged violations can be costly and require a significant diversion of time, resources and attention from senior management. Violations of the FCPA, the U.K. Bribery Act or other applicable anti-bribery, anti-corruption and anti-money laundering laws often result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges and criminal or civil sanctions, penalties and fines, any of which could adversely affect our business and financial condition.

Risks Relating to Securities, Investment and Liquidity

If one or more of our counterparty financial institutions default on their obligations to us, we may incur significant losses or our financial liquidity could be adversely impacted.

As part of our hedging activities, we enter into transactions involving derivative financial instruments, which may include forward contracts, commodity futures contracts, option contracts, collars and swaps, with various financial institutions. In addition, we have significant amounts of cash, cash equivalents and other investments on deposit or in accounts with banks or other financial institutions in the United States and abroad. We are also a party to a Second Amended and Restated Credit Agreement (as amended to date, the “Credit Agreement”) with several financial institutions that provides us with a senior secured revolving credit facility (the “Credit Facility”) under which we had $875.4 million of borrowing capacity as of November 30, 2025. We may rely on that borrowing capacity to fund our operations. As a result, we are exposed to the risk of default by, or failure of, counterparty financial institutions. This risk may be heightened during economic downturns and periods of uncertainty in the financial markets, including as a result of macroeconomic and geopolitical conditions. If one of our counterparties were to become insolvent or file for bankruptcy, our ability to borrow funds or recover losses incurred as a result of a default or our assets that are deposited or held in accounts with such counterparty may be limited by the counterparty’s liquidity or the applicable laws governing the insolvency or bankruptcy proceedings. In the event of default or failure of one or more of our counterparties, we could incur significant losses or our financial liquidity could be adversely impacted, which could negatively impact our results of operations and financial condition.

We have debt and interest payment requirements at a level that may restrict our future operations.

As of November 30, 2025, we had $1.0 billion of unsecured debt. Additionally, we had $875.4 million of borrowing capacity under the Credit Facility. The Credit Facility is secured by domestic and Canadian inventories, accounts receivable, and other assets, such as the Levi’s ® trademarks in the U.S. Our debt requires us to dedicate a substantial portion of any cash flow from operations to the payment of interest and principal due under our debt, which reduces funds available for other business purposes and results in us having lower net income (or greater net loss) than we otherwise would have had. This dedicated use of cash could impact our ability to successfully compete by, for example:

• increasing our vulnerability to general adverse economic and industry conditions, including store closures, decreased foot traffic and recession or inflationary pressures;

• limiting our flexibility in planning for or reacting to changes in our business and industry;

• placing us at a competitive disadvantage compared to some of our competitors that have less debt; and

• limiting our ability to obtain additional financing in the future, if required to fund working capital and capital expenditures and for other general corporate purposes.

A substantial portion of our debt is Euro-denominated senior notes. In addition, borrowings under our Credit Facility bear interest at variable rates and a portion of those borrowings may be in Canadian Dollars. As a result, increases in market interest rates and changes in foreign exchange rates could require a greater portion of our cash flow to be used to pay interest, which could further hinder our operations. Increases in market interest rates may also affect the trading price of our debt securities that

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bear interest at a fixed rate. Our ability to satisfy our obligations and to reduce our total debt depends on our future operating performance and on economic, financial, competitive and other factors, many of which are beyond our control.

Our ability to pay dividends, repurchase stock and make acquisitions is dependent on a variety of factors, including restrictions in our Credit Facility that may limit our activities.

We need liquidity sufficient to fund payments of dividends, repurchases of stock and to make acquisitions. Future activities will depend upon our earnings, economic conditions, liquidity and capital requirements and other factors, including our debt leverage. Even if we have sufficient resources to pay dividends and to repurchase shares of our common stock, our board of directors may determine to use such resources to fund other company initiatives. Accordingly, we cannot make any assurance that future dividends will be paid, or future repurchases will be made, at levels comparable to our historical practices, if at all.

Additionally, our Credit Facility contains restrictions, including covenants limiting our ability to incur additional debt, grant liens, make acquisitions and other investments, prepay specified debt, consolidate, merge or acquire other businesses or engage in other fundamental changes, sell assets, pay dividends and other distributions, repurchase our stock, enter into transactions with affiliates, enter into capital leases or certain leases not in the ordinary course of business, enter into certain derivatives, grant negative pledges on our assets, make loans or other investments, guarantee third-party obligations, engage in sale leasebacks and make changes in our corporate structure. These restrictions, in combination with our leveraged condition, may make it more difficult for us to successfully execute our business strategy, grow our business or compete with companies not similarly restricted.

If our foreign subsidiaries are unable to distribute cash to us when needed, we may be unable to satisfy our obligations under our debt securities, which could force us to sell assets or use cash that we were planning to use elsewhere in our business.

We conduct our international operations through foreign subsidiaries and we only receive the cash that remains after our foreign subsidiaries satisfy their obligations. We may depend upon funds from our foreign subsidiaries for a portion of the funds necessary to meet our debt service obligations. Any agreements our foreign subsidiaries enter into with other parties, as well as applicable laws and regulations that may subject repatriation payments to taxation or limit the right and ability of non-U.S. subsidiaries and affiliates to pay dividends and remit cash to affiliated companies, may restrict the ability of our foreign subsidiaries to pay dividends or make other distributions to us. If those subsidiaries are unable to transfer the amount of cash that we need, we may be unable to make payments on our debt obligations, which could force us to sell assets or use cash that we were planning on using elsewhere in our business, which could hinder our operations.

Changes in our credit ratings or macroeconomic conditions may affect our liquidity, increasing borrowing costs and limiting our financing options.

As of November 30, 2025, our long-term debt was rated BB+ by S&P Global Ratings, Ba1 by Moody’s Investors Service, Inc and BBB- by Fitch Ratings, Inc. If our credit ratings are lowered, borrowing costs for future long-term debt or short-term credit facilities may increase and our financing options, including our access to the unsecured credit market, could be limited. In addition, macroeconomic conditions such as increased volatility or disruption in the credit markets could adversely affect our ability to obtain financing or refinance existing debt on terms that would be acceptable to us.

Risks Relating to Ownership of Our Class A Common Stock

The market price of our Class A common stock may be volatile or may decline steeply or suddenly regardless of our operating performance and we may not be able to meet investor or analyst expectations. You may lose all or part of your investment.

The trading prices of our Class A common stock may differ and fluctuate from time to time in response to numerous factors, some of which are beyond our control. These factors may include, among others, overall performance of the equity markets and the economy as a whole, actual or anticipated fluctuations in our revenues or other operating results or those of our competitors, our ability to meet our published guidance and securities analyst expectations, recommendations by securities analysts or announcements by us or our competitors of significant products or features, innovations, acquisitions, strategic partnerships, joint ventures, capital commitments, divestitures or other dispositions. In the past, stockholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business and seriously harm our business.

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Future sales of our Class A common stock by existing stockholders could cause our stock price to decline.

If our existing stockholders, including employees, who obtain equity, sell or indicate an intention to sell, substantial amounts of our Class A common stock in the public market, the trading price of our Class A common stock could decline. As of January 23, 2026, we had outstanding a total of 103,742,231 shares of Class A common stock and 286,725,056 shares of Class B common stock. Of these shares, only the shares of Class A common stock are currently freely tradable without restrictions or further registration under the Securities Act of 1933, as amended (the "Securities Act"), except for any shares held by persons who are our “affiliates” as defined in Rule 144 under the Securities Act, which may be sold in compliance with Rule 144 under the Securities Act.

Sales of a substantial number of such shares, or the perception that such sales may occur, could cause our stock price to decline or make it more difficult for the holders of our Class A common stock to sell at a time and price that they deem appropriate.

A majority of holders of our Class B common stock have contractual rights, subject to certain conditions, to require us to file registration statements for the public resale of the shares of Class A common stock issuable upon conversion of their Class B common stock, or to include such shares in registration statements that we may file.

The dual class structure of our common stock concentrates voting control with descendants of the family of Levi Strauss, who have the ability to control the outcome of matters submitted for stockholder approval, which will limit your ability to influence corporate matters and may depress the trading price of our Class A common stock.

Our Class B common stock, which is entitled to ten votes per share, is primarily owned by descendants of the family of our founder, Levi Strauss, and their relatives and trusts established for their behalf. Collectively, these persons have the ability to control the outcome of stockholder votes, including the election of our board of directors and the approval or rejection of a merger, change of control or other significant corporate transaction. In addition, so long as any shares of Class B common stock remain outstanding, the approval of the holders of a majority of our then-outstanding Class B common stock (or, in certain cases, a majority of our then-outstanding Class A common stock and Class B common stock, voting together as a single class) will be required in order for us to take certain actions.

This control may adversely affect the market price of our Class A common stock. In addition, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indexes. S&P Dow Jones and FTSE Russell have announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices, including the S&P 500. These changes exclude companies with multiple classes of shares of common stock from being added to such indices. In addition, several stockholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual class structure of our common stock may prevent the inclusion of our Class A common stock in such indices and may cause stockholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any such exclusion from indices could result in a less active trading market for our Class A common stock. Any actions or publications by stockholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of our Class A common stock.

We believe having a long-term-focused, committed and engaged stockholder base provides us with an important strategic advantage, particularly in our business, where our more than 170-year history contributes to the iconic reputations of our brands. However, the interests of these stockholders may not always be aligned with each other or with the interests of our other stockholders. By exercising their control, these stockholders could cause our company to take actions that are at odds with the investment goals or interests of institutional, short-term or other non-controlling investors, or that have a negative effect on our stock price. Further, because these stockholders control the majority of our Class B common stock, we might be a less attractive takeover target, which could adversely affect the market price of our Class A common stock.

Future securities issuances could result in significant dilution to our stockholders and impair the market price of our Class A common stock.

Future issuances of our Class A common stock or the conversion of a substantial number of shares of our Class B common stock, or the perception that these issuances or conversions may occur, could depress the market price of our Class A common stock and result in dilution to existing holders of our Class A common stock. Also, to the extent stock-based awards are issued or become vested, there will be further dilution. The amount of dilution could be substantial depending upon the size of the issuances or exercises. Furthermore, we may issue additional equity securities that could have rights senior to those of our Class A common stock. As a result, purchasers of Class A common stock bear the risk that future issuances of debt or equity securities may reduce the value of such shares and further dilute their ownership interest.

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Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of our Class A common stock.

Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could depress the trading price of our Class A common stock by acting to discourage, delay or prevent a change of control of our company or changes in our management that our stockholders may deem advantageous. In particular, our amended and restated certificate of incorporation and amended and restated bylaws:

• establish a classified board of directors so that not all members are elected at one time;

• permit our board of directors to establish the number of directors and fill any vacancies and newly-created directorships;

• authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;

• provide that our board of directors is expressly authorized to make, alter or repeal our bylaws;

• restrict the forum for certain litigation against us to Delaware or to Federal court;

• reflect the dual class structure of our common stock; and

• establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders.

Any provision of our amended and restated certificate of incorporation, our amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change of control could limit the opportunity for our stockholders to receive a premium for their shares of Class A common stock and could also affect the price that some investors are willing to pay for our Class A common stock.

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Item 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes thereto included in Part II, Item 8 of this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements” and “Risk Factors” for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements. 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. See “Financial Information Presentation—Fiscal Year.”

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is designed to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results.

To supplement our consolidated financial statements prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we use certain non-GAAP financial measures throughout this Annual Report, as described further below, to provide investors with additional useful information about our financial performance, to enhance the overall understanding of our past performance and future prospects and to allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We are presenting these non-GAAP financial measures to assist investors in seeing our financial performance from management’s point of view and because we believe they provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.

However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, our consolidated financial statements prepared and presented in accordance with GAAP. For more information on our calculation of non-GAAP measures and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP, see “Non-GAAP Financial Measures.”

Overview

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 and related accessories for men, women and children around the world under our Levi’s ® , Levi Strauss Signature™, Denizen ® and Beyond Yoga ® brands. We service our consumers through our global infrastructure which develops, sources and markets our products around the world. In the first quarter of 2024 we announced the strategic decision to discontinue the Denizen ® brand. The wind down of Denizen ® brand operations was substantially complete as of March 2, 2025. In the second quarter of 2025 we entered into a definitive agreement to sell our Dockers ® business. On July 31, 2025 the Company sold the Dockers ® intellectual property and operations in the U.S. and Canada. The sale of the remaining Dockers ® operations is expected to close in the first quarter of 2026 and be completed on or around February 27, 2026.

We operate our business according to three reportable segments: Americas, Europe, and Asia, collectively comprising our Levi's Brands business, which includes the Levi's ® , Levi Strauss Signature™ and Denizen ® brands. The Beyond Yoga ® business, which is managed separately, does not meet the quantitative thresholds for reportable segments but is presented separately to increase transparency of our performance.

Our iconic, enduring brands are brought to life every day around the world by our talented and creative employees and partners. The Levi’s ® brand epitomizes classic, authentic American style and effortless cool. We have cultivated Levi’s ® as a lifestyle brand that is inclusive and democratic in the eyes of consumers while offering products that feel exclusive, personalized and original. This approach has enabled the Levi’s ® brand to evolve with the times and continually reach a new, younger audience, while our rich heritage continues to drive relevance and appeal across demographics. The Levi Strauss Signature™ and Denizen ® brands, which we developed for value-conscious consumers, offer quality craftsmanship and great fit

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and style at affordable prices. The Beyond Yoga ® brand is a body positive, premium athleisure apparel brand focused on quality, fit and comfort.

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 (“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 November 30, 2025, our products were sold in approximately 50,000 retail locations in approximately 120 countries, including approximately 3,300 brand-dedicated stores and shop-in-shops. As of November 30, 2025, we had 1,231 company-operated stores located in 38 countries and approximately 500 company-operated shop-in-shops. The remainder of our brand-dedicated stores and shop-in-shops were operated by franchisees and other partners.

Across all of our brands, pants – including jeans, casual pants, dress pants, shorts, skirts and activewear – represented 67% and 66% of our total units sold in fiscal years 2025 and 2024, respectively. Tops – including shirts, sweaters, jackets, dresses and jumpsuits – represented 29% and 28% of our total units sold in fiscal years 2025 and 2024, respectively. The remainder of our products are accessories. Men's products generated 60% and 62% of our net revenues in fiscal years 2025 and 2024, respectively. Women’s products generated 39% and 37% of our net revenues in fiscal years 2025 and 2024, respectively. The remainder of our products are non-gendered. Products other than denim bottoms – which include tops, accessories and pants excluding jeans – represented 36% and 35% of our net revenues in fiscal years 2025 and 2024, respectively.

Our Europe and Asia businesses, collectively, contributed 45% of our net revenues and 42% of our segment operating income in fiscal year 2025, as compared to 45% of our net revenues and 40% of our segment operating income in fiscal year 2024. Revenues from our international business, which includes our Europe and Asia segments, as well as Canada and Latin America from our Americas segment, represented 57% and 56% of our net revenues in fiscal year 2025 and fiscal year 2024, respectively. Sales of Levi’s ® brand products represented approximately 94% of our net revenues in both fiscal year 2025 and 2024.

Our wholesale channel generated 51% and 53% of our net revenues in fiscal years 2025 and 2024, respectively. Sales to franchise partners, included as a component of our wholesale channel, generated 6% of our net revenues in both fiscal years 2025 and 2024. Our DTC channel generated 49% and 47% of our net revenues in fiscal years 2025 and 2024, respectively, with our company operated e-commerce business representing 23% and 21% of DTC channel net revenues and 11% and 10% of total net revenues in fiscal years 2025 and 2024, respectively.

Our key long-term objectives are to strengthen our brands globally in order to deliver sustainable profitable growth and generate industry-leading shareholder returns. Critical strategies to achieve these objectives include being a brand-led business, putting DTC first, and further powering the portfolio by diversifying across geographies, categories, genders and channels. We intend to achieve these strategies through operational excellence and a one team mindset.

Sale of Dockers ®

In the fourth quarter of 2024, the Company announced it had initiated a formal review of strategic alternatives for the Dockers ® brand, which could include a potential sale or other strategic transaction. During the second quarter of 2025 the Company entered into a definitive agreement to sell its Dockers ® business, subject to customary closing conditions. On July 31, 2025 the Company sold the Dockers ® intellectual property and operations in the U.S. and Canada. The sale of the remaining Dockers ® operations is expected to close in the first quarter of 2026 and be completed on or around February 27, 2026. The Dockers ® business was reported as discontinued operations in the consolidated statements of income for all periods prese nted. The current year and prior year metrics included in this Management’s Discussion and Analysis exclude the impact of Dockers ® .

Project Fuel

In the first quarter of 2024, our Board of Directors (the "Board") approved a multi-year global productivity initiative, “Project Fuel”, designed to accelerate the execution of our Brand Led and DTC First strategies while fueling long-term profitable growth. This was a two-year initiative that began in 2024, with a focus on optimizing our operating model and structure, redesigning business processes and identifying opportunities to reduce costs and simplify processes across our organization. While this initiative is substantially complete, we continue efforts in line with our global productivity initiative. In connection with Project Fuel, the Company changed its distribution strategy from an owned and operated model to a mix of owned and third-party operated distribution centers, which has resulted and will continue to result in the sale, lease, exit or transfer of certain distribution centers currently owned and operated by the Company to third-party logistics providers. The first phase of the global productivity initiative was completed primarily in the first half of 2024. The second phase was substantially completed as of November 30, 2025. However we continue to transition the operations of certain of our global distribution and

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fulfillment centers to third-party logistics providers. During the years ended November 30, 2025 and December 1, 2024 we incurred restructuring charges of $24.5 million and $185.6 million, respectively, and restructuring related charges of $12.1 million and $54.3 million, respectively, which are included in “Restructuring charges, net” and “Selling, general and administrative expenses” (“SG&A”), respectively, in the consolidated statements of income. We may incur additional significant restructuring and restructuring related charges as we progress our global productivity initiative, which could be material in a future fiscal quarter or year.

Other Factors Affecting Our Business

We believe the other key business and marketplace factors that are impacting our business include the following:

• Additional tariffs recently imposed on products imported into the U.S. from most jurisdictions, along with retaliatory actions by other countries, have created an uncertain environment for global trade. In addition, many of our products are produced in countries, such as Bangladesh, Pakistan, Cambodia and Vietnam, which have been the subject of U.S. reciprocal tariffs, and there may be additional tariff actions in the future. As a result of the new tariffs, expected additional tariffs, retaliatory actions taken by other countries in response, and continuing uncertainty as to the status of U.S. trade policy, the cost of our inventory in the U.S. has increased and may increase further in the future. These increased costs could lead to a significant increase in cost of sales and a significant reduction in gross margin and income from operations. We are monitoring the changing tariffs and trade restrictions, assessing the impact on our business and taking steps to mitigate their impact, which include supplier negotiations, cost reductions, changing the timing of receiving inventory and selective price increases. However, the duration, magnitude and scope of any additional tariffs, trade restrictions, retaliatory or other measures are difficult to predict, including related unfavorable impacts to consumer demand, to market share as a result of selective prices increases, along with the extent (if any) to which we will be able to offset the impacts of such actions through our mitigation efforts. These tariff actions, retaliatory measures, or other trade restrictions could materially and adversely affect our business.

• As part of our effort to optimize our logistics network, we are in the process of transitioning and stabilizing the operation of certain of our global distribution and fulfillment centers to third-party logistics providers. This transition from owner-operated facilities to third-party logistics providers has and may continue to cause interruptions to these centers as we transition or restructure systems, technology and employees. We have and may continue to experience shipping delays, order cancellations and increased costs as a result of this transition and stabilization. Given that, we are subject to concentration risks and any disruptions, delays or other events impacting the business of the third-party logistics providers may have a significant impact on our business, including our ability to timely fulfill orders. If we continue to encounter problems with our distribution system, our ability to meet customer and consumer expectations, manage inventory, complete sales and achieve operating efficiencies may be adversely affected.

• Macroeconomic pressures in the U.S. and the global economy such as changes in tariff regimes, inflation and recession fears are creating a complex and challenging retail environment for us and our customers as consumers may reduce discretionary spending. A decline in consumer spending has had and may continue to have an adverse effect on our revenues, margins and net income. These trends historically have impacted and may impact our future financial results, affecting revenue, margins and net income.

• As we continue to execute on our strategic framework to be DTC First, we expect to see greater impact on our margins, as the diversification of our business model across channels, geographies, brands, and categories affects our gross margin. For example, if our sales in higher gross margin channels, geographies, brands and categories grow at a faster rate than in our lower gross margin channels, geographies, brands and categories, we would expect a favorable impact to aggregate gross margin over time. Gross margin in our Europe segment is generally higher than in our Americas and Asia segments. DTC sales generally have higher gross margins than sales through third parties, although DTC sales also typically have higher selling expenses and could have lower profitability. Gross margin on tops is generally lower than our bottoms category. Enhancements to our existing product offerings, or our expansion into new brands and products categories, may also impact our future gross margin.

• The current domestic and international political environment, including volatile trade relations and military and civil conflicts, have resulted in uncertainty surrounding the future state of the global economy. There is greater uncertainty with respect to potential changes in trade regulations, tariffs, sanctions and export controls which also increase volatility in the global economy. This environment has affected and may continue to affect production and distribution lead times, increasing our costs and potentially affecting our ability to meet customer demand. If these disruptions persist, they may require us to modify our current sourcing and logistics practices, which may impact our product costs, and, if not mitigated, could have a material adverse effect on our business and results of operations.

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• Foreign currencies continue to be volatile, with the volatility increasing due to the imposition of tariffs and evolving trade policies. Significant fluctuations of the U.S. Dollar against various foreign currencies, including the Euro and Mexican Peso, has in the past and may in the future adversely impact our financial results, revenue, operating margins and net income.

• Tax legislation continues to evolve globally with new laws and regulations that create uncertainty and may adversely affect our financial results. The Organization for Economic Cooperation and Development reached agreement among over 140 countries to implement a minimum 15% tax rate on certain multinational enterprises, commonly referred to as Pillar Two. Many countries continue to announce changes in their tax laws and regulations based on the Pillar Two framework. Additionally, U.S Congress enacted the One Big Beautiful Bill Act (“OBBBA”) which includes significant provisions, including extension of the Tax Cuts and Jobs Act and modifications to the international tax framework. Although we expect the OBBBA to have immaterial impacts to our financial results, we will continue monitoring its impacts.

• There has been increased focus from our stakeholders, including consumers, employees, investors, regulatory organizations and legislatures on corporate environmental, social, and governance (“ESG”) practices, including corporate practices related to the causes and impacts of climate change and corporate statements, practices or products related to a variety of social issues. We expect that stakeholder expectations and actions with respect to ESG practices and social issues and regulatory requirements will continue to evolve rapidly, which may impact our reputation and financial results.

These factors contribute to a global market environment of intense competition, constant product innovation and continuing cost pressure, and combine with the continuing global economic conditions to create a challenging commercial and economic environment. We evaluate these factors as we develop and execute our strategies.

For additional information regarding these risks, as well as other risks we face, see the risk factors discussed in Part I, Item 1A. “Risk Factors”.

Seasonality of Sales

We typically achieve our largest quarterly revenues in the fourth quarter. In fiscal year 2025, our net revenues in the first, second, third and fourth quarters represented 24%, 23%, 25% and 28%, respectively, of our total net revenues for the fiscal year. Fiscal year 2024 benefited from a 53rd week, which was included in the fourth quarter, impacting net revenues by approximately $78 million or 1.3%. In fiscal year 2024, our net revenues in the first, second, third and fourth quarters represented 24%, 23%, 24% and 29%, respectively, of our total net revenues for the fiscal year.

We typically achieve a significant amount of revenues from our DTC channel on the Friday following Thanksgiving Day, which is commonly referred to as Black Friday. Due to the timing of our fiscal year end, a particular fiscal year might include one, two or no Black Fridays, which could impact our net revenues for the fiscal year. Fiscal years 2025 and 2024 included one Black Friday.

The level of our working capital reflects the seasonality of our business and varies throughout the fiscal year to support our seasonal and holiday revenue patterns as well as business trends.

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Our Results for the Fourth Quarter of Fiscal Year 2025

• Net revenues.   Compared to the fourth quarter of fiscal year 2024, consolidated net revenues increased 0.9% on a reported basis and 5.0% on an organic net revenues basis, driven by growth in DTC, which grew across our regions. Wholesale revenues decreased on a reported basis and were flat on an organic basis primarily due to declines in the Americas. Organic net revenues excludes the impact on net revenues of the footwear and Denizen ® wind downs as well as the 53rd week in fiscal year 2024, which benefited net revenues by approximately $78 million or 4.5% in the fourth quarter.

• Net income from continuing operations. Compared to the fourth quarter of 2024, consolidated net income of $160.2 million decreased 11% from $180.3 million. The decrease was primarily due to higher income tax expense and lower gross margin, partially offset by higher revenues and lower restructuring charges.

• Adjusted EBIT. Compared to the fourth quarter of 2024, Adjusted EBIT of $213.4 million decreased from $243.1 million due to higher Adjusted SG&A and lower gross margins, partially offset by higher revenues. As a result, Adjusted EBIT margin was 12.1%, 180 basis points lower than the fourth quarter of 2024 on a reported basis, and 200 basis points lower on a constant-currency basis.

• Adjusted net income. Compared to the fourth quarter of 2024, Adjusted net income of $162.9 million decreased from $199.9 million, primarily due to the lower Adjusted EBIT described above and higher income taxes in the current year.

• Diluted earnings per share from continuing operations. We recognized diluted earnings per share from continuing operations of $0.40, compared to $0.45 in the fourth quarter of 2024, mainly due to the decrease in Net income from continuing operations described above.

• Adjusted diluted earnings per share. Compared to the fourth quarter of 2024, Adjusted diluted earnings per share of $0.41 decreased from $0.49 mainly due to the decrease in Adjusted net income described above. Currency translation favorably affected Adjusted diluted earnings per share by $0.01

Our Fiscal Year 2025 Results

• Net revenues.   Compared to fiscal year 2024, consolidated net revenues increased 4.1% on a reported basis and 7.2% on an organic net revenues basis. The increase was driven by growth in DTC, which grew across our regions. Wholesale revenues decreased on a reported basis primarily due to the footwear and Denizen ® wind downs and the impact of the 53rd week in fiscal year 2024, which are excluded from organic net revenues. Organic net revenues increased primarily due to increases in the Americas and Europe.

• Net income from continuing operations. Compared to the fiscal year 2024, consolidated net income from continuing operations increased to $502.0 million from $210.4 million, primarily due to higher revenue and gross profit and lower restructuring charges and goodwill and intangible impairment charges, partially offset by higher income taxes. Restructuring charges were $24.5 million in the current year compared to $185.6 million recognized in the prior year, and Beyond Yoga ® goodwill and intangible impairment charges recorded in the third quarter of 2024 were $111.4 million. Operating margin was 10.8% compared to 4.4% in fiscal year 2024.

• Adjusted EBIT. Compared to fiscal year 2024, Adjusted EBIT of $719.0 million increased from $645.4 million primarily due to higher revenue and gross profit, partially offset by higher Adjusted SG&A. Adjusted EBIT margin was 11.4%, 70 basis points higher than the prior fiscal year. Currency translation did not have a significant impact on Adjusted EBIT margin.

• Adjusted net income. Compared to fiscal year 2024, Adjusted net income increased to $537.1 million from $499.4 million. The increase was primarily due to higher Adjusted EBIT described above, partially offset by higher income taxes in the current year.

• Diluted earnings per share from continuing operations. Compared to fiscal year 2024, diluted earnings per share from continuing operations of $1.26 increased from $0.52 mainly due to the higher Net income from continuing operations described above.

• Adjusted diluted earnings per share. Compared to fiscal year 2024, Adjusted diluted earnings per share of $1.34 increased from $1.24 due to the higher Adjusted net income described above. Currency translation did not have a significant impact on Adjusted diluted earnings per share.

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For more information on Organic net revenues, Adjusted SG&A, Adjusted EBIT, Adjusted net income and Adjusted diluted earnings per share, measures not prepared in accordance with GAAP, and reconciliations of such measures to net income from continuing operations and diluted earnings per share from continuing operations, see “Non-GAAP Financial Measures.”

Financial Information Presentation

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. Fiscal year 2025 was a 52-week year, ending on November 30, 2025, and 2024 was a 53-week year ending December 1, 2024. Each quarter of fiscal years 2025 and 2024 consisted of 13 weeks with the exception of the fourth quarter of 2024 which consisted of 14 weeks.

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 Beyond Yoga ® business, which is managed separately, does not meet the quantitative thresholds for reportable segments but is presented separately to increase transparency of our performance. In the first quarter of 2024, we announced the strategic decision to discontinue the Denizen ® brand. The wind down of the Denizen ® brand operations was substantially complete as of March 2, 2025.

Classification .   Our classification of certain significant revenues and expenses reflects the following:

• Net revenues comprise net sales and licensing revenues. Net sales include sales of products to wholesale customers, including franchised stores, and direct sales to consumers at our company-operated stores and shop-in-shops located within department stores and other third-party locations, as well as company-operated e-commerce sites. Net revenues are recorded net of discounts, allowances for estimated returns and retailer promotions and other incentives. Licensing revenues, which include revenues from the use of our trademarks in connection with the manufacturing, advertising and distribution of trademarked products by third-party licensees, are earned and recognized as products are sold by licensees based on royalty rates as set forth in the applicable licensing agreements.

• Cost of goods sold primarily comprises product costs, labor and related overhead, sourcing costs, inbound freight, internal transfers and the cost of operating our manufacturing facilities, including the related depreciation expense. On both a reported and constant-currency basis, cost of goods sold reflects the transactional currency impact resulting from the purchase of products in a currency other than the functional currency.

• Selling expenses reflected in SG&A include, among other things, all occupancy costs and depreciation associated with our company-operated stores and commissions associated with our company-operated shop-in-shops, as well as costs associated with our e-commerce operations.

• 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.

Discontinued operations . At the end of the first quarter of 2025, the Dockers ® business was held for sale and reported as discontinued operations in the consolidated statements of income for all periods presented.

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Results of Operations

A discussion regarding our results of operations for fiscal year 2025 compared to fiscal year 2024 is presented below. A discussion regarding our results of operations for fiscal year 2024 compared to fiscal year 2023 can be found under Item 7 – Management’s Discussion and Analysis in our Annual Report on Form 10-K for the year ended December 1, 2024, filed with the SEC on January 29, 2025.

The following table summarizes, 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:

Year Ended

November 30,

December 1,

Increase

(Decrease)

November 30,

December 1,

% of Net

Revenues

% of Net

Revenues

(Dollars in millions, except per share amounts)

Net revenues

Cost of goods sold

Gross profit

Selling, general and administrative expenses

Restructuring charges, net

Goodwill and other intangible asset impairment charges

Operating income

Interest expense

Other income (expense), net

Income from continuing operations before income taxes

Income tax expense

Net income from continuing operations

Net income from discontinued operations, net of taxes

Net income

Earnings per common share:

Continuing operations - Basic

Discontinued operations - Basic

Net income - Basic

Continuing operations - Diluted

Discontinued operations - Diluted

Net income - Diluted

Weighted-average common shares outstanding (in millions):

Basic

Diluted

* Not meaningful

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Net revenues

The following table presents net revenues for the periods indicated, and the changes in net revenues on both reported and organic net revenues basis from period to period:

Year Ended

% Increase (Decrease)

November 30,

December 1,

Reported

Organic Net Revenues

(Dollars in millions)

Net revenues:

Levi's Brands:

Americas

Europe

Asia

Total Levi's Brands net revenues

Beyond Yoga ®

Total net revenues

Net revenues by channel:

Wholesale

DTC

Total net revenues

Levi’s Brands net revenues:

Levi’s ®

Levi Strauss Signature™

Denizen ® (1)

Total Levi's Brands net revenues

(1) The wind down of Denizen ® brand operations was substantially complete as of March 2, 2025.

* Not meaningful

Currency translation had a favorable impact on total net revenues of approximately $5 million for the year ended November 30, 2025. Total net revenues increased on both a reported and organic net revenues basis for the year ended November 30, 2025, as compared to the same period in 2024. The increase in reported net revenues was partially offset by the impact of a 53rd week in fiscal year 2024, impacting net revenues by approximately $78 million, or 1.3% and the wind down of the Denizen ® business and footwear category, which impacted net revenues unfavorably by $30 million and $66 million, respectively, for the year ended November 30, 2025.

Americas .   Currency translation had an unfavorable impact on net revenues of approximately $27 million for the year ended November 30, 2025. Net revenues in our Americas segment increased on both a reported and organic net revenues basis driven by growth in our DTC channel and, on an organic net revenues basis, growth in our wholesale channel.

The increase in DTC revenues was attributable to growth across all markets, led by the U.S. and Latin America, driven by store performance due to higher traffic, and also benefited from higher average revenues per unit. E-commerce revenues increased, primarily due to higher online traffic. Wholesale revenues increased on an organic net revenues basis primarily due to higher volume in the U.S. and Latin America, including from door and category expansion and price increases, partially offset by a decrease related to lower shipping in connection with the transition to the distribution center in Groveport, Ohio. Additionally, the Colombia stores, distribution and logistics operations acquired at the start of the second quarter of 2024, contributed $22.4 million to net revenue growth for the year ended November 30, 2025. Wholesale revenues on a reported basis were flat compared with fiscal year 2024 primarily due to the exit of our Denizen ® business and an additional week in fiscal year 2024.

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Europe .  Currency translation had a favorable impact on net revenues of approximately $50 million for the year ended November 30, 2025. Net revenues in Europe increased on both a reported and organic net revenues basis, reflecting growth in our DTC channel as well as growth in our wholesale channel on an organic net revenues basis. The increase in DTC revenues was primarily due to store performance and an increase in e-commerce revenues primarily due to higher traffic and higher conversion. Wholesale revenues increased on an organic net revenues basis compared to the prior year period primarily due to higher volumes including as a result of a shift in shipments in the fourth quarter of 2025 to provide products earlier to wholesale customers in line with the related contracts, and decreased on a reported basis due to the wind down of the footwear category.

Asia .   Currency translation had an unfavorable impact on net revenues of approximately $19 million for the year ended November 30, 2025. Net revenues in Asia increased on both reported and organic net revenues basis driven by growth in our DTC channel. The increase in DTC revenues was primarily due to store expansion and strong performance in our company-operated stores as a result of increased volume driven by higher traffic, and an increase in e-commerce revenues from successful marketing and promotions. We benefited from 38 more stores in operation as of November 30, 2025, as compared to December 1, 2024. Wholesale net revenues decreased due to the impacts of currency and were flat on an organic net revenues basis due to a decrease in units sold offset by an increase in average revenues per unit. DTC and wholesale revenues benefited from price increases, primarily in Turkey and India.

Beyond Yoga ® .   Currency translation did not have a significant impact on net revenues for the year ended November 30, 2025. Net revenues in Beyond Yoga ® increased on a reported and organic net revenues basis primarily due to growth in e-commerce net revenues, partially offset by a decrease in wholesale net revenues.

Net revenues by channel

Wholesale .   Currency translation had an unfavorable impact on net revenues of approximately $7 million for the year ended November 30, 2025. Net revenues in our wholesale channel decreased on a reported basis and increased on an organic net revenues basis for the year ended November 30, 2025. The decrease on a reported basis was primarily driven by the exit of the Denizen ® brand in the Americas, the wind down of the footwear category, and the impact of the 53rd week in 2024. Wholesale revenues increased on an organic basis compared with fiscal year 2024 in the Americas and Europe due to higher volumes.

DTC (Direct to Consumer) .   Currency translation had a favorable impact on net revenues of approximately $12 million for the year ended November 30, 2025. Net revenues in our DTC channel increased on both a reported and organic net revenues basis for the year ended November 30, 2025 driven primarily by store performance and e-commerce, which was driven primarily by higher traffic. Additionally, fiscal year 2024 included the benefit of a 53rd week which resulted in lower sales compared to fiscal year 2024 on a reported basis. On an organic net revenues basis our DTC business grew 9% in the U.S., 8% in Europe, and 13% in Asia for the year ended November 30, 2025. As a percentage of net revenues on a reported basis for the year ended November 30, 2025, DTC comprised 49% of total net revenues.

Levi’s Brands net revenues

Levi’s ® . Currency translation had a favorable impact on net revenues of approximately $6 million for the year ended November 30, 2025. Net revenues for the Levi’s ® brand increased on both a reported and organic net revenues basis due to higher revenue in our DTC channel, primarily due to store performance and higher e-commerce traffic, and, on an organic net revenues basis, an increase in wholesale revenues, primarily in the Americas and Europe, due to higher volume.

Levi Strauss Signature™. Currency translation did not have a significant impact on net revenues for the year ended November 30, 2025. Net revenues for the Levi Strauss Signature™ brand increased on a reported and organic net revenues basis due to higher units sold.

Denizen ® . Currency translation did not have a significant impact on net revenues for the year ended November 30, 2025. Net revenues decreased on a reported basis due to the exit of the brand.

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Gross profit

The following table shows consolidated gross profit and gross margin for the periods indicated and the changes in these items from period to period:

Year Ended

November 30,

December 1,

Increase

(Decrease)

(Dollars in millions)

Net revenues

Cost of goods sold

Gross profit

Gross margin

Currency translation had a favorable impact on gross profit of approximately $12 million for the year ended November 30, 2025. The increase in gross margin was primarily driven by favorable channel mix, price increases, and lower product costs, partially offset by the impact of tariffs. Additionally currency, including both transaction and translation impacts, favorably impacted gross margin by approximately 40 basis points.

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Selling, general and administrative expenses

The following table shows SG&A for the periods indicated, the changes in these items from period to period and these items expressed as a percentage of net revenues.

Year Ended

November 30,

December 1,

Increase

(Decrease)

November 30,

December 1,

% of Net

Revenues

% of Net

Revenues

(Dollars in millions)

Selling

Advertising and promotion

Distribution

Other

Total SG&A

Currency translation had an unfavorable impact on SG&A of approximately $9 million for the year ended November 30, 2025. Fiscal year 2024 included additional expenses associated with the 53rd week.

Selling .   Currency translation had an unfavorable impact on selling expenses of approximately $4 million for the year ended November 30, 2025. Excluding the effects of currency, selling expenses increased primarily due to the growth of the DTC business as a result of costs related to store expansion and store performance in the current year as compared to the prior fiscal year. This was partially offset by e-commerce related fulfillment costs of approximately $37.0 million that are now included as distribution expenses.

Advertising and promotion .   Currency translation had an unfavorable impact on advertising and promotion expenses of approximately $2 million for the year ended November 30, 2025. Excluding the effects of currency, the increase in advertising and promotion expenses was due to increased media spending.

Distribution .   Currency translation had an unfavorable impact on distribution expenses of approximately $3 million for the year ended November 30, 2025. Excluding the effects of currency, the increase in distribution expenses was primarily due to higher spend in support of both our DTC and wholesale businesses, including e-commerce related fulfillment costs for the year ended November 30, 2025 of approximately $37.0 million that were previously classified as selling, costs to transition to third-party distribution centers in Groveport, Ohio and Dorsten, Germany and costs to run parallel distribution centers in the U.S. as we continue to implement our distribution strategy model to operate a mix of owned and third-party operated distribution centers. This is partially offset by lower costs from Company owned and operated distribution centers that we are winding down and exiting.

Other .   Other expenses include functional administrative and organization costs, information resources, and marketing organization costs. Currency translation did not have a significant impact on other expenses for the year ended November 30, 2025. Excluding the effects of currency, the decrease in other costs was primarily due to decreases in restructuring related charges and an $11.1 million impairment charge related to discontinued technology projects in the prior year. This was partially offset by increases in incentive compensation, technology costs and professional fees. During the years ended November 30, 2025 and December 1, 2024 we recognized $12.1 million and $54.3 million of restructuring related charges, respectively.

Restructuring charges, net

During the year ended November 30, 2025, we recognized restructuring charges of $24.5 million in connection with Project Fuel consisting primarily of severance and other post-employment benefit charges, asset impairments and contract terminations in connection with closures of distribution centers which were partially offset by a gain on the sale of a previously closed distribution center.

During the year ended December 1, 2024 we recognized restructuring charges of $185.6 million in connection with Project Fuel consisting primarily of severance, post-employment benefit charges, contract terminations and asset impairments.

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Goodwill and other intangible asset impairment charges

During the third quarter of 2025, as part of our annual review of the Beyond Yoga ® reporting unit, we elected to perform a single step quantitative impairment test on the goodwill and indefinite lived trademark intangible assigned to the Beyond Yoga ® reporting unit. Although the fair values of the Beyond Yoga ® reporting unit and the indefinite lived trademark intangible exceeded their carrying values, the fair values of the Beyond Yoga ® reporting unit and the indefinite lived trademark intangible were less than 10% over their carrying values.

During the year ended November 30, 2025, we recognized impairment charges of $2.5 million related to our business in Bolivia. During the year ended December 1, 2024, we recognized impairment charges of $116.9 million. The impairment charges recorded in fiscal 2024 primarily consisted of $111.4 million related to the Beyond Yoga ® acquisition composed of a $36.3 million impairment in goodwill, a $66.0 million impairment in the trademark intangible asset and a $9.1 million impairment in the customer relationship intangible assets. During fiscal year 2024, we appointed new Beyond Yoga ® executive management and implemented a new strategic plan for growth and expansion. Additionally, we recognized $5.5 million in goodwill impairment charges in fiscal 2024 related to our footwear business as a result of the decision to discontinue the category.

Operating income

The following table shows operating income and corporate expenses for the periods indicated, the changes in these items from period to period and these items expressed as a percentage of corresponding segment net revenues or consolidated net revenues:

Year Ended

November 30,

December 1,

Increase

(Decrease)

November 30,

December 1,

% of Net

Revenues

% of Net

Revenues

(Dollars in millions)

Operating income:

Levi’s Brands:

Americas

Europe

Asia

Total Levi’s Brands operating income

Beyond Yoga ® operating (loss) income

Restructuring charges, net

Goodwill and other intangible asset impairment charges

Corporate expenses

Total operating income

Operating margin

v Percentage of consolidated net revenues

* Not meaningful

Currency translation did not have a significant impact on total operating income for the year ended November 30, 2025.

Levi’s Brands operating income .

• Americas.   Currency translation had an unfavorable impact on operating income in the segment of approximately $4 million for the year ended November 30, 2025. Excluding the effects of currency, the increase in operating income was primarily due to higher revenues as compared to the prior fiscal year, partially offset by higher SG&A.

• Europe.   Currency translation had a favorable impact on operating income in the segment of approximately $10 million for the year ended November 30, 2025. Excluding the effects of currency, the increase in operating income

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was primarily due to an increase in gross margin and revenues as compared to the prior fiscal year, partially offset by higher SG&A.

• Asia.   Currency translation had an unfavorable impact on operating income in the segment of approximately $4 million for the year ended November 30, 2025. Excluding the effects of currency, the increase in operating income was primarily due to higher revenues and gross margin as compared to the prior fiscal year, partially offset by higher SG&A.

Beyond Yoga ® operating loss .  Currency translation did not have a significant impact on operating income in the segment for the year ended November 30, 2025. The decrease in operating loss was primarily due to higher revenues and gross margin, partially offset by higher SG&A. Fiscal year 2024 included inventory clearing activities which negatively impacted operating loss by approximately $9 million.

Restructuring charges, net. During the year ended November 30, 2025, we recognized restructuring charges of $24.5 million in connection with Project Fuel consisting primarily of severance and other post-employment benefit charges, asset impairments and contract terminations in connection with closures of distribution centers which were partially offset by a gain on the sale of a previously closed distribution center.

During the year ended December 1, 2024 we recognized restructuring charges of $185.6 million in connection with Project Fuel consisting primarily of severance, post-employment benefit charges, contract terminations and asset impairments.

Goodwill and other intangible asset impairment charges. During the year ended November 30, 2025, we recognized impairment charges of $2.5 million related to our business in Bolivia. During the year ended December 1, 2024, we recognized impairment charges of $116.9 million. The impairment charges recorded in fiscal 2024 primarily consisted of $111.4 million related to the Beyond Yoga ® acquisition composed of a $36.3 million impairment in goodwill, a $66.0 million impairment in the trademark intangible asset and a $9.1 million impairment in the customer relationship intangible assets. During fiscal year 2024, we appointed new Beyond Yoga ® executive management and implemented a new strategic plan for growth and expansion. Additionally, we recognized $5.5 million in goodwill impairment charges in fiscal 2024 related to our footwear business as a result of the decision to discontinue the category.

Corporate expenses .   Corporate expenses represent costs that management does not attribute to any of our operating segments. Included in corporate expenses are certain impairment charges, acquisition related charges and other corporate staff costs and costs associated with our global inventory sourcing organization which are reported as a component of consolidated gross margin.

Currency translation did not have a significant impact on corporate expenses for the year ended November 30, 2025. The decrease in corporate expenses for the year ended November 30, 2025 is primarily due to decreases in restructuring related charges and technology impairments related to our restructuring initiative and lower global sourcing costs. These decreases were partially offset by increases in incentive compensation, professional fees and technology costs.

Operating margin . Currency translation did not have a significant impact on operating margin for the year ended November 30, 2025. Compared to fiscal year 2024, consolidated operating income increased 157.9% to $677.6 million from $262.7 million due primarily to lower restructuring charges and lower goodwill and other intangible asset impairment charges. Higher revenues and gross margin, partially offset by higher SG&A which decreased as a percent of net revenues, also contributed to the increase in operating income and operating margin.

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Interest expense

Interest expense was $48.6 million for the year ended November 30, 2025, as compared to $41.8 million in the prior fiscal year. Our weighted-average interest rate on average borrowings outstanding for fiscal year 2025 was 4.44%, as compared to 4.01% for fiscal year 2024.

Other income (expense), net

Other income (expense), net, primarily consists of foreign exchange management activities and transactions. For the years ended November 30, 2025 and December 1, 2024, we recorded net other income of $5.0 million and net other expenses of $3.3 million, respectively. The net other income recognized in fiscal year 2025 was primarily due to $38.2 million of gains on forward foreign exchange contracts, $6.6 million of marketable securities gains, $23.0 million of interest income on cash and cash equivalents, and $5.8 million of realized gains from marketable equity securities held in a Rabbi trust in connection with our deferred compensation plan, partially offset by $48.1 million of foreign currency transaction losses, and $20.8 million of pension and deferred compensation expenses. The net expense recognized in fiscal year 2024 was primarily due to $21.9 million of losses on forward foreign exchange contracts, partially offset by $11.8 million of marketable securities gains and $8.2 million of foreign currency transaction gains.

Income tax expense

Income tax expense was $132.0 million for the year ended November 30, 2025, compared to $7.2 million for the prior fiscal year. Our effective income tax rate was 20.8% for the year ended November 30, 2025, compared to 3.3% for the prior fiscal year. The increase in the effective tax rate in fiscal year 2025 was primarily driven by the prior year tax benefits from an international intellectual property transaction, a $10.1 million tax benefit related to favorable resolutions of state audits and a lower earnings before taxes base that magnified the impact of these discrete items. During fiscal year 2024, we completed an intercompany sale of intellectual property between entities based in different tax jurisdictions resulting in net tax benefits of $46.4 million.

On July 4, 2025, the OBBBA was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We determined that the OBBBA did not have a material impact on the consolidated financial statements for the year ended November 30, 2025. We will continue to evaluate the full impact of these legislative changes as additional guidance becomes available.

Discontinued operations

Discontinued operations consist of the operations of our Dockers ® business. See Note 2 to our audited consolidated financial statements included in Part II, Item 8 of this Annual Report for additional information.

Liquidity and Capital Resources

Liquidity outlook

We believe we will have adequate liquidity over the next 12 months and in the longer term to operate our business and to meet our cash requirements. Over the long term, we plan to deploy capital across all four of our capital allocation priorities: (1) to reinvest 3.5-4% of our revenue in capital, including high growth investment opportunities and initiatives, to grow our business organically, (2) to return capital to our stockholders in the form of cash dividends, with a dividend payout ratio target of 25-35% of net income; (3) to pursue high return on investment acquisitions, both organic and inorganic, that support our current strategies; and (4) to repurchase shares with the goal of offsetting dilution or opportunistic buybacks or both, while maintaining an adequate public float of our shares. Our aim is to return 55-65% of our Adjusted free cash flow to stockholders in the form of dividends and share repurchases. We continue to concentrate our capital investments in new stores, distribution capacity and technology to accelerate the profitable growth of our business. For more information on our calculation of Adjusted free cash flow, a non-GAAP financial measure, see “Non-GAAP Financial Measures.”

Future determinations regarding the declaration and payment of dividends, if any, will be at the discretion of our Board and will depend on then-existing conditions, including our results of operations, payout ratio, capital requirements, financial condition, prospects, contractual arrangements, any limitations on payment of dividends present in our current and future debt agreements and other factors that our Board may deem relevant.

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Cash sources

We have historically relied primarily on cash flows from operations, borrowings under credit facilities, issuances of notes and other forms of debt financing. We regularly explore financing and debt reduction alternatives, including new credit agreements, unsecured and secured note issuances, equity financing, equipment and real estate financing, securitizations and asset sales.

Our Credit Agreement provides for an asset-based, senior secured revolving credit facility (“Credit Facility”), in which the borrowing availability is primarily based on the value of our U.S. Levi’s ® trademarks and the levels of accounts receivable and inventory in the United States and Canada. The maximum availability under the facility is $1.0 billion, of which $950.0 million is available to us for revolving loans in U.S. Dollars and $50.0 million is available to us for revolving loans either in U.S. Dollars or Canadian Dollars. The facility has an accordion feature which, if exercised, can expand the maximum availability to $1.15 billion.

As of November 30, 2025, we did not have any borrowings under the Credit Facility. Unused availability under the facility was $875.4 million, and our total availability of $894.4 million (based on collateral levels as defined by the agreement less outstanding borrowings under the Credit Facility) was reduced by $19.0 million from other credit-related instruments. We also had cash and cash equivalents totaling approximately $757.9 million and short-term investments totaling approximately $90.9 million resulting in a total liquidity position (unused availability, cash and cash equivalents and short-term investments) of approximately $1.7 billion. Of our $757.9 million in cash and cash equivalents, approximately $591.9 million was held by foreign subsidiaries.

Cash uses

Our principal cash requirements include working capital, capital expenditures, payments of principal and interest on our debt, payments of taxes, contributions to our pension plans and payments for postretirement health benefit plans, payment of taxes resulting from net settlement of shares issued under our equity incentive plans and, if market conditions warrant, occasional investments in, or acquisitions of, business ventures. In addition, we regularly evaluate our ability to pay dividends or repurchase stock, all consistent with the terms of our debt agreements.

During the first quarter of 2025, we repurchased 1.6 million shares for $30.0 million, plus broker’s commissions, in the open market. During the third quarter of 2025, we entered into an accelerated share repurchase transaction with a third-party financial institution to repurchase an aggregate of $120.0 million of our Class A common stock as part of our share repurchase program. At inception, the Company made an initial payment of $120.0 million and received and immediately retired 4,989,605 shares of Class A common stock, representing 80% of the dollar amount of the transaction based on the August 1, 2025 closing share price over the transaction’s term (the “ASR Agreement”). We settled the ASR Agreement in the fourth quarter of 2025 and received and immediately retired an additional 596,917 shares. The average price paid per share over the transaction’s term was $21.48. The transaction was recorded as a reduction of retained earnings of $109.4 million and a reduction of additional paid-in capital of $11.6 million. We used a portion of the net proceeds from the sale of Dockers ® intellectual property and operations in the U.S. and Canada to fund the upfront payment due under the ASR Agreement.

During fiscal 2024, 4.8 million shares were repurchased for $90.0 million, plus broker's commissions, in the open market.

In July 2025, we used the proceeds from the newly issued €475.0 million 4.000% Senior Notes due 2030 plus cash on hand to redeem all of the €475.0 million 3.375% Senior Notes due 2027.

In January 2026, a cash dividend of $0.14 per share was declared to holders of record of our Class A and Class B common stock at the close of business on February 10, 2026. The cash dividend will be payable on February 25, 2026, for a total quarterly dividend of approximately $55 million. In the absence of a dividend policy, we will continue to evaluate and consider declaration of dividends on a quarterly basis and the expectation is that they will grow in line with net income.

Cash requirements for fiscal 2026 are expected to consist primarily of capital expenditures for investments in new stores, distribution capacity and technology. Total capital expenditures for fiscal 2026 are expected to be approximately $238 million. Additionally, we have commitments of approximately $280 million in the aggregate for sponsorship, naming rights and related benefits with respect to the Levi's ® Stadium through 2043.

Based on the fair value of our capital stock and the number of shares outstanding as of November 30, 2025, future payments related to shares surrendered for employee tax withholding on the exercise or vesting of outstanding equity awards could range up to approximately $45 million, which could become payable in 2026.

These estimates and projections are based upon assumptions that are inherently subject to significant economic, competitive, legislative and other uncertainties and contingencies, many of which are beyond our control. Accordingly, our

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actual expenditures and liabilities may be materially higher or lower than the estimates and projections reflected. The inclusion of these projections and estimates should not be regarded as a representation by us that the estimates will prove to be correct.

Cash flows

The following table summarizes, for the periods indicated, selected items in our consolidated statements of cash flows:

Year Ended

November 30,

December 1,

(Dollars in millions)

Cash provided by operating activities

Cash used for investing activities

Cash used for financing activities

Cash and cash equivalents as of fiscal year end

Cash flows from operating activities

Cash provided by operating activities was $529.6 million for fiscal year 2025, as compared to $898.4 million for fiscal year 2024. The decrease in cash provided by operating activities in fiscal year 2025 is primarily driven by higher spending on inventory and SG&A, partially offset by lower collections on trade receivables,and lower spending on restructuring costs. In fiscal year 2024, we also received payments of approximately $87.1 million associated with the transition of our distribution center to a third-party logistics provider.

Cash flows from investing activities

Cash used for investing activities was $68.7 million for fiscal year 2025, as compared to $281.1 million for fiscal year 2024. The decrease in net cash used for investing activities was primarily due to net proceeds from the sale of Dockers ® U.S. and Canada business, higher net proceeds from forward foreign exchange contracts and proceeds from the sale of assets compared to the same period in 2024, as well as payments to acquire a business in fiscal year 2024. The decreases are partially offset by net payments to acquire short-term investments in fiscal year 2025.

Cash flows from financing activities

Cash used for financing activities was $400.2 million for fiscal year 2025, as compared to $319.3 million for fiscal year 2024. Cash used in fiscal year 2025 primarily reflects dividend payments of $212.9 million, accelerated share repurchase of $120.0 million, common stock repurchases of $30.5 million, and tax withholdings on equity awards of $21.7 million. Cash used in fiscal year 2024 primarily reflects dividend payments of $198.5 million, common stock repurchases of $90.1 million, and tax withholdings on equity awards of $24.7 million.

Indebtedness

The borrower of substantially all of our debt is Levi Strauss & Co., the parent and U.S. operating company. Of our total debt of $1.0 billion as of November 30, 2025, 100% was fixed-rate debt. As of November 30, 2025, our required aggregate debt principal payments on our unsecured long-term debt were $1.1 billion, with payments starting in 2030. There were no short-term borrowings as of November 30, 2025.

Our long-term debt agreements contain customary covenants restricting our activities as well as those of our subsidiaries. We were in compliance with all of these covenants as of November 30, 2025.

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Non-GAAP Financial Measures

Adjusted SG&A, Adjusted SG&A Margin, Adjusted EBIT, Adjusted EBIT Margin, Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income Margin, and Adjusted Diluted Earnings per Share

In the table below, we define the following non-GAAP measures. Because the results of our Dockers ® business are classified as discontinued operations, those results are not reflected in our non-GAAP measures.

Most comparable GAAP measure

Non-GAAP measure

Non-GAAP measure definition

Selling, general and administrative expenses (“SG&A”)

Adjusted SG&A

SG&A excluding acquisition and integration related charges, property, plant, and equipment impairment, and restructuring related charges and other, net.

SG&A margin

Adjusted SG&A margin

Adjusted SG&A as a percentage of net revenues

Net income from continuing operations

Adjusted EBIT

Net income from continuing operations excluding income tax expense, interest expense, other (income) expense, net, acquisition and integration related charges, property, plant, and equipment impairment, goodwill and other intangible asset impairment charges, restructuring charges, net and restructuring related charges and other, net.

Net income margin from continuing operations

Adjusted EBIT margin

Adjusted EBIT as a percentage of net revenues

Net income from continuing operations

Adjusted EBITDA

Adjusted EBIT excluding depreciation and amortization expense

Net income from continuing operations

Adjusted net income

Net income from continuing operations excluding acquisition and integration related charges, property, plant, and equipment impairment, goodwill and other intangible asset impairment charges, restructuring charges, net, restructuring related charges and other, net, and loss on early extinguishment of debt, adjusted to give effect to the income tax impact of such adjustments.

Net income margin from continuing operations

Adjusted net income margin

Adjusted net income as a percentage of net revenues

Diluted earnings per share from continuing operations

Adjusted diluted earnings per share

Adjusted net income per weighted-average number of diluted common shares outstanding

We believe Adjusted SG&A, Adjusted SG&A margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted EBITDA, Adjusted net income, Adjusted net income margin and Adjusted diluted earnings per share are useful to investors because they help identify underlying trends in our business that could otherwise be masked by certain expenses that we include in calculating net income but that can vary from company to company depending on its financing, capital structure and the method by which its assets were acquired, and can also vary significantly from period to period. Our management also uses Adjusted EBIT in conjunction with other GAAP financial measures for planning purposes, including as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance.

Adjusted SG&A, Adjusted SG&A margin, Adjusted EBIT, Adjusted EBIT margin, Adjusted EBITDA, Adjusted net income, Adjusted net income margin and Adjusted diluted earnings per share have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of our results prepared and presented in accordance with GAAP. Some of these limitations include:

• Adjusted EBIT, Adjusted EBIT margin and Adjusted EBITDA do not reflect income tax payments that reduce cash available to us;

• Adjusted EBIT, Adjusted EBIT margin and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments on our indebtedness, which reduces cash available to us;

• Adjusted EBIT, Adjusted EBIT margin and Adjusted EBITDA exclude other income (expense), net, which includes realized and unrealized gains and losses on our forward foreign exchange contracts and transaction gains and losses on our foreign exchange balances, although these items affect the amount and timing of cash available to us when these gains and losses are realized;

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• all of these non-GAAP financial measures exclude acquisition and integration charges, impairment charges and early terminations and restructuring charges, net and restructuring related charges, severance and other, net which can affect our current and future cash requirements;

• all of these non-GAAP financial measures exclude certain other SG&A expense items, which include severance, transaction and deal related costs, including acquisition and integration costs which can affect our current and future cash requirements;

• all of these non-GAAP financial measures exclude certain other SG&A expense items, which include non-cash property and equipment and right-of-use asset impairment charges. The store-related assets being impaired may still be in use, resulting in lower recurring expenses of depreciation of property and equipment and right-of-use asset amortization. Although property and equipment impairment charges are non-cash expenses, the assets being impaired may need to be replaced in the future which can affect our current and future cash requirements;

• the expenses and other items that we exclude in our calculations of all of these non-GAAP financial measures may differ from the expenses and other items, if any, that other companies may exclude from all of these non-GAAP financial measures or similarly titled measures;

• Adjusted EBITDA excludes the recurring, non-cash expenses of depreciation of property and equipment and, although these are non-cash expenses, the assets being depreciated may need to be replaced in the future; and

• Adjusted net income, Adjusted net income margin and Adjusted diluted earnings per share do not include all of the effects of income taxes and changes in income taxes reflected in net income.

Because of these limitations, all of these non-GAAP financial measures should be considered along with net income and other operating and financial performance measures prepared and presented in accordance with GAAP.

Adjusted SG&A:

The following table presents a reconciliation of SG&A, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted SG&A for each of the periods presented.

Year Ended

November 30,

December 1,

(Dollars in millions)

Most comparable GAAP measure:

Selling, general and administrative expenses

Non-GAAP measure:

Selling, general and administrative expenses

Acquisition and integration related charges (1)

Property, plant, and equipment impairment (2)

Restructuring related charges and other, net (3)

Adjusted SG&A

SG&A margin

Adjusted SG&A margin

Acquisition and integration related charges includes acquisition-related compensation subject to the continued employment of certain Beyond Yoga® employees. In the first quarter of 2024, their employment ceased, resulting in the acceleration of the remaining compensation.

For the year ended December 1, 2024, property, plant, and equipment impairment primarily includes charges of $11.1 million of impairments related to technology projects discontinued as a result of Project Fuel.

For the year ended November 30, 2025, restructuring related charges and other, net primarily consists of $12.1 million of Project Fuel related costs which includes consulting costs, distribution center transition costs, and employee incentives related to executing the Dockers transaction, as well as other costs including legal settlements of $3.5 million, offset by an insurance recovery of $1.5 million.

For the year ended December 1, 2024, restructuring related charges and other, net primarily relates to consulting fees associated with our restructuring initiative of $54.3 million, legal settlements of $8.4 million, certain executive separation charges of $2.7 million, and transaction and deal related costs of $3.3 million, offset by a favorable sales-tax related settlement of $4.4 million.

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Adjusted EBIT and Adjusted EBITDA:

The following table presents a reconciliation of net income from continuing operations, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBIT and Adjusted EBITDA for each of the periods presented.

Year Ended

November 30,

December 1,

(Dollars in millions)

Most comparable GAAP measure:

Net income from continuing operations

Non-GAAP measure:

Net income from continuing operations

Income tax expense

Interest expense

Other (income) expense, net

Acquisition and integration related charges (1)

Property, plant, and equipment impairment (2)

Goodwill and other intangible asset impairment charges (3)

Restructuring charges, net (4)

Restructuring related charges and other, net (5)

Adjusted EBIT

Depreciation and amortization (6)

Adjusted EBITDA

Net income margin from continuing operations

Adjusted EBIT margin

Acquisition and integration related charges includes acquisition-related compensation subject to the continued employment of certain Beyond Yoga® employees. In the first quarter of 2024, their employment ceased, resulting in the acceleration of the remaining compensation.

For the year ended December 1, 2024, property, plant, and equipment impairment primarily includes charges of $11.1 million of impairments related to technology projects discontinued as a result of Project Fuel.

For the year ended November 30, 2025, goodwill impairment charges includes the recognition of a $2.5 million goodwill impairment charge related to our business in Bolivia.

For the year ended December 1, 2024, goodwill and other intangible asset impairment charges includes impairment charges of $36.3 million to Beyond Yoga® reporting unit goodwill, $66.0 million related to the Beyond Yoga® trademark, $9.1 million related to the Beyond Yoga® customer relationship intangible assets and a $5.5 million goodwill impairment charge related to our footwear business.

For the year ended November 30, 2025, restructuring charges, net includes $24.5 million in connection with Project Fuel consisting of $9.2 million of asset impairment in connection with the closures of distribution centers, $21.1 million of severance and other post-employment benefit charges, and $3.5 million of contract terminations and other costs, partially offset by a $9.3 million gain on the sale of a previously closed distribution center.

For the year ended December 1, 2024 restructuring charges, net includes $185.6 million related to Project Fuel consisting primarily of severance and other post-employment benefit charges, contract terminations and asset impairments.

For the year ended November 30, 2025, restructuring related charges and other, net primarily consists of $12.1 million of Project Fuel related costs which includes consulting costs, distribution center transition costs, and employee incentives related to executing the Dockers transaction, as well as other costs including legal settlements of $3.5 million, offset by an insurance recovery of $1.5 million.

For the year ended December 1, 2024, restructuring related charges and other, net primarily relates to consulting fees associated with our restructuring initiative of $54.3 million, legal settlements of $8.4 million, certain executive separation charges of $2.7 million, and transaction and deal related costs of $3.3 million, offset by a favorable sales-tax related settlement of $4.4 million.

Depreciation and amortization for the years ended November 30, 2025 and December 1, 2024 is net of $0.3 million and $0.3 million, respectively, of amortization included in restructuring related charges and other, net.

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Adjusted Net Income:

The following table presents a reconciliation of net income from continuing operations, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted net income for each of the periods presented.

Year Ended

November 30,

December 1,

(Dollars in millions)

Most comparable GAAP measure:

Net income from continuing operations

Non-GAAP measure:

Net income from continuing operations

Acquisition and integration related charges (1)

Property, plant, and equipment impairment (2)

Goodwill and other intangible asset impairment charges (3)

Restructuring charges, net (4)

Restructuring related charges and other, net (5)

Loss on early extinguishment of debt

Tax impact of adjustments (6)

Adjusted net income

Net income margin from continuing operations

Adjusted net income margin

Acquisition and integration related charges includes acquisition-related compensation subject to the continued employment of certain Beyond Yoga® employees. In the first quarter of 2024, their employment ceased, resulting in the acceleration of the remaining compensation.

For the year ended December 1, 2024, property, plant, and equipment impairment primarily includes charges of $11.1 million of impairments related to technology projects discontinued as a result of Project Fuel.

For the year ended November 30, 2025, goodwill impairment charges includes the recognition of a $2.5 million goodwill impairment charge related to our business in Bolivia.

For the year ended December 1, 2024, goodwill and other intangible asset impairment charges includes impairment charges of $36.3 million to Beyond Yoga® reporting unit goodwill, $66.0 million related to the Beyond Yoga® trademark, $9.1 million related to the Beyond Yoga® customer relationship intangible assets and a $5.5 million goodwill impairment charge related to our footwear business.

For the year ended November 30, 2025, restructuring charges, net includes $24.5 million in connection with Project Fuel consisting of $9.2 million of asset impairment in connection with the closures of distribution centers, $21.1 million of severance and other post-employment benefit charges, and $3.5 million of contract terminations and other costs, partially offset by a $9.3 million gain on the sale of a previously closed distribution center.

For the year ended December 1, 2024 restructuring charges, net includes $185.6 million related to Project Fuel consisting primarily of severance and other post-employment benefit charges, contract terminations and asset impairments.

For the year ended November 30, 2025, restructuring related and other charges, net primarily consists of $12.1 million of Project Fuel related costs which includes consulting costs, distribution center transition costs, and employee incentives related to executing the Dockers transaction, as well as other costs including estimated legal settlements of $3.5 million, offset by an insurance recovery of $1.5 million. It additionally includes subrogation related to an insurance recovery of $1.3 million which was recorded within other income (expense).

For the year ended December 1, 2024, restructuring related charges and other, net primarily relates to consulting fees associated with our restructuring initiative of $54.3 million, legal settlements of $8.4 million, certain executive separation charges of $2.7 million, and transaction and deal related costs of $3.3 million, offset by a favorable sales-tax related settlement of $4.4 million.

Tax impact calculated using the annual effective tax rate, excluding discrete costs and benefits. For the year ended November 30, 2025, the effective tax rate used was approximately 21%. For the year ended December 1, 2024, the tax impact of the Beyond Yoga® impairment charges were calculated using the U.S. specific tax rate of 24%. Excluding the impacts of the Beyond Yoga® impairment charges and the strategic intercompany sale of intellectual property, the effective tax rate for the year ended December 1, 2024 is approximately 24%. Refer to Note 19 to our audited consolidated financial statements included in this report for more information on the effective tax rate.

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Adjusted Diluted Earnings per Share:

The following table presents a reconciliation of diluted earnings per share from continuing operations, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted diluted earnings per share for each of the periods presented.

Year Ended

November 30,

December 1,

(Dollars in millions, except per share amounts)

Most comparable GAAP measure:

Diluted earnings per share from continuing operations

Non-GAAP measure:

Diluted earnings per share from continuing operations

Acquisition and integration related charges (1)

Property, plant, and equipment impairment (2)

Goodwill and other intangible asset impairment charges (3)

Restructuring charges, net (4)

Restructuring related charges and other, net (5)

Loss on early extinguishment of debt

Tax impact of adjustments (6)

Adjusted diluted earnings per share

Acquisition and integration related charges includes acquisition-related compensation subject to the continued employment of certain Beyond Yoga® employees. In the first quarter of 2024, their employment ceased, resulting in the acceleration of the remaining compensation.

For the year ended December 1, 2024, property, plant, and equipment impairment primarily includes charges of $11.1 million of impairments related to technology projects discontinued as a result of Project Fuel.

For the year ended November 30, 2025, goodwill impairment charges includes the recognition of a $2.5 million goodwill impairment charge related to our business in Bolivia.

For the year ended December 1, 2024, goodwill and other intangible asset impairment charges includes impairment charges of $36.3 million to Beyond Yoga® reporting unit goodwill, $66.0 million related to the Beyond Yoga® trademark, $9.1 million related to the Beyond Yoga® customer relationship intangible assets and a $5.5 million goodwill impairment charge related to our footwear business.

For the year ended November 30, 2025, restructuring charges, net includes $24.5 million in connection with Project Fuel consisting of $9.2 million of asset impairment in connection with the closures of distribution centers, $21.1 million of severance and other post-employment benefit charges, and $3.5 million of contract terminations and other costs, partially offset by a $9.3 million gain on the sale of a previously closed distribution center.

For the year ended December 1, 2024 restructuring charges, net includes $185.6 million related to Project Fuel consisting primarily of severance and other post-employment benefit charges, contract terminations and asset impairments.

For the year ended November 30, 2025, restructuring related and other charges, net primarily consists of $12.1 million of Project Fuel related costs which includes consulting costs, distribution center transition costs, and employee incentives related to executing the Dockers transaction, as well as other costs including estimated legal settlements of $3.5 million, offset by an insurance recovery of $1.5 million. It additionally includes subrogation related to an insurance recovery of $1.3 million which was recorded within other income (expense).

For the year ended December 1, 2024, restructuring related charges and other, net primarily relates to consulting fees associated with our restructuring initiative of $54.3 million, legal settlements of $8.4 million, certain executive separation charges of $2.7 million, and transaction and deal related costs of $3.3 million, offset by a favorable sales-tax related settlement of $4.4 million.

Tax impact calculated using the annual effective tax rate, excluding discrete costs and benefits. For the year ended November 30, 2025, the effective tax rate used was approximately 21%. For the year ended December 1, 2024, the tax impact of the Beyond Yoga® impairment charges were calculated using the U.S. specific tax rate of 24%. Excluding the impacts of the Beyond Yoga® impairment charges and the strategic intercompany sale of intellectual property, the effective tax rate for the year ended December 1, 2024 is approximately 24%. Refer to Note 19 to our audited consolidated financial statements included in this report for more information on the effective tax rate.

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Adjusted Free Cash Flow:

Adjusted free cash flow, a non-GAAP financial measure, includes net cash flow from operating activities less purchases of property, plant and equipment. We believe Adjusted free cash flow is an important liquidity measure of the cash that is available after capital expenditures for operational expenses and investment in our business. We believe Adjusted free cash flow is useful to investors because it measures our ability to generate or use cash. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet, invest in future growth and return capital to stockholders.

Our use of Adjusted free cash flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results under GAAP. First, Adjusted free cash flow is not a substitute for net cash flow from operating activities. Second, other companies may calculate Adjusted free cash flow or similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of Adjusted free cash flow as a tool for comparison. Additionally, the utility of Adjusted free cash flow is further limited as it does not reflect our future contractual commitments and does not represent the total increase or decrease in our cash balance for a given period. Because of these and other limitations, Adjusted free cash flow should be considered along with net cash flow from operating activities and other comparable financial measures prepared and presented in accordance with GAAP.

The following table presents a reconciliation of net cash flow from operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted free cash flow for each of the periods presented.

Year Ended

November 30,

December 1,

(Dollars in millions)

Most comparable GAAP measure:

Net cash provided by operating activities

Net cash used for investing activities

Net cash used for financing activities

Non-GAAP measure:

Net cash provided by operating activities

Purchases of property, plant and equipment

Adjusted free cash flow

Organic Net Revenues and Constant-Currency:

We report our net revenues in accordance with GAAP, as well as on an organic net revenues basis in order to facilitate period-to-period comparisons of our revenues which excludes the impact of fluctuating foreign currency exchange rates from the change in reported net revenues, net revenues derived from business acquisitions or divestitures or wind downs impacting the previous 12 months of the reporting date and the estimated impact of any 53rd week. We report our operating results in accordance with GAAP, as well as on a constant-currency basis in order to facilitate period-to-period comparisons of our results without regard to the impact of fluctuating foreign currency exchange rates. These measures exclude the results of our Dockers ® business which is classified as discontinued operations.

The term foreign currency exchange rates refers to the exchange rates we use to translate our operating results for all countries where the functional currency is not the U.S. Dollar into U.S. Dollars. Because we are a global company, foreign currency exchange rates used for translation may have a significant effect on our reported results. In general, our reported financial results are affected positively by a weaker U.S. Dollar and are affected negatively by a stronger U.S. Dollar as compared to the foreign currencies in which we conduct our business. References to our operating results on a constant-currency basis mean our operating results without the impact of foreign currency translation fluctuations.

We calculate constant-currency amounts by translating local currency amounts in the prior-year period at actual foreign currency exchange rates for the current period. Our constant-currency results do not eliminate the transaction currency impact, which primarily includes the realized and unrealized gains and losses recognized from the measurement and remeasurement of purchases and sales of products in a currency other than the functional currency and of forward foreign exchange contracts.

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We believe disclosure of organic net revenues and Adjusted EBIT constant-currency, Adjusted EBIT Margin constant-currency and Adjusted Net Income constant-currency results is helpful to investors because it facilitates period-to-period comparisons of our results by increasing the transparency of our underlying performance by excluding the impact of fluctuating foreign currency exchange rates. However, organic net revenues and constant-currency results are non-GAAP financial measures and are not meant to be considered in isolation or as a substitute for comparable measures prepared in accordance with GAAP. Organic net revenues and constant-currency results have no standardized meaning prescribed by GAAP, are not prepared under any comprehensive set of accounting rules or principles and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. Organic net revenues and constant-currency results have limitations in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies.

Organic Net Revenues:

The table below sets forth the calculation of net revenues by segment on an organic net revenues basis for each of the periods presented.

Year Ended

November 30,

December 1,

% Increase

(Decrease)

(Dollars in millions)

Total revenues (1)

As reported

Impact of foreign currency exchange rates

Impact of 53rd week (2)

Net revenues from Denizen ® wind down (3)

Net revenues from Footwear category wind down (4)

Organic net revenues

Americas

As reported

Impact of foreign currency exchange rates

Impact of 53rd week

Net revenues from Denizen ® wind down (3)

Organic net revenues - Americas

Europe

As reported

Impact of foreign currency exchange rates

Impact of 53rd week

Net revenues from Footwear category wind down (4)

Organic net revenues - Europe

Asia

As reported

Impact of foreign currency exchange rates

Organic net revenues - Asia

Beyond Yoga ®

As reported

Impact of 53rd week

Organic net revenues - Beyond Yoga ®

These measures exclude the results of our Dockers ® business, which is classified as discontinued operations.

Impact of 53rd week for the year ended December 1, 2024 is presented on a continuing operations basis and excludes $6.1 million of net revenues from our Dockers ® business, which is classified as discontinued operations.

Net revenues from Denizen ® wind down for the year ended December 1, 2024 is presented on a constant-currency basis and includes an unfavorable foreign currency impact of $0.7 million.

Net revenues from Footwear category wind down for the year ended December 1, 2024 is presented on a constant-currency basis and includes a favorable foreign currency impact of $2.6 million.

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The table below sets forth the calculation of net revenues by channel on an organic net revenues basis for each of the periods presented.

Year Ended

November 30,

December 1,

% Increase

(Decrease)

(Dollars in millions)

Total net revenues (1)

As reported

Impact of foreign currency exchange rates

Impact of 53rd week (2)

Net revenues from Denizen ® wind down (3)

Net revenues from Footwear category wind down (4)

Organic net revenues

Wholesale

As reported

Impact of foreign currency exchange rates

Impact of 53rd week (2)

Net revenues from Denizen ® wind down (3)

Net revenues from Footwear category wind down (4)

Organic net revenues - Wholesale

DTC

As reported

Impact of foreign currency exchange rates

Impact of 53rd week (2)

Organic net revenues - DTC

These measures exclude the results of our Dockers ® business, which is classified as discontinued operations.

Impact of 53rd week for the year ended December 1, 2024 is presented on a continuing operations basis and excludes $4.4 million and $1.7 million of wholesale and DTC net revenues, respectively, from our Dockers ® business, which is classified as discontinued operations.

Net revenues from Denizen ® wind down for the year ended December 1, 2024 is presented on a constant-currency basis and includes an unfavorable foreign currency impact of $0.7 million.

Net revenues from Footwear category wind down for the year ended December 1, 2024 is presented on a constant-currency basis and includes a favorable foreign currency impact of $2.6 million.

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The table below sets forth the calculation of net revenues by brand on an organic net revenues basis for each of the periods presented.

Year Ended

November 30,

December 1,

% Increase

(Decrease)

(Dollars in millions)

Total Levi’s Brands net revenues

As reported

Impact of foreign currency exchange rates

Impact of 53rd week

Net revenues from Denizen ® wind down (1)

Net revenues from Footwear category wind down (2)

Organic net revenues

Levi’s ®

As reported

Impact of foreign currency exchange rates

Impact of 53rd week

Net revenues from Footwear category wind down (2)

Organic net revenues - Levi’s ®

Levi Strauss Signature TM

As reported

Impact of foreign currency exchange rates

Organic net revenues - Levi Strauss Signature TM

Denizen ®

As reported

Impact of foreign currency exchange rates

Net revenues from Denizen ® wind down (1)

Organic net revenues - Denizen ®

Net revenues from Denizen ® wind down for the year ended December 1, 2024 is presented on a constant-currency basis and includes an unfavorable foreign currency impact of $0.7 million.

Net revenues from Footwear category wind down for the year ended December 1, 2024 is presented on a constant-currency basis and includes a favorable foreign currency impact of $2.6 million.

* Not meaningful

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Constant-Currency Adjusted EBIT and Constant-Currency Adjusted EBIT Margin:

The table below sets forth the calculation of Adjusted EBIT and Adjusted EBIT margin on a constant-currency basis for each of the periods presented.

Year Ended

November 30,

December 1,

% Increase

(Decrease)

(Dollars in millions)

Adjusted EBIT (1)

Impact of foreign currency exchange rates

Constant-currency Adjusted EBIT

Adjusted EBIT margin

Impact of foreign currency exchange rates

Constant-currency Adjusted EBIT margin (2)

Adjusted EBIT is reconciled from net income from continuing operations which is the most comparable GAAP measure. Refer to Adjusted EBIT and Adjusted EBITDA table for more information.

We define constant-currency Adjusted EBIT margin as constant-currency Adjusted EBIT as a percentage of constant-currency net revenues.

* Not meaningful

Constant-Currency Adjusted Net Income and Adjusted Diluted Earnings per Share:

The table below sets forth the calculation of Adjusted net income and Adjusted diluted earnings per share on a constant-currency basis for each of the periods presented.

Year Ended

November 30,

December 1,

% Increase

(Decrease)

(Dollars in millions, except per share amounts)

Adjusted net income (1)

Impact of foreign currency exchange rates

Constant-currency Adjusted net income

Constant-currency Adjusted net income margin (2)

Adjusted diluted earnings per share

Impact of foreign currency exchange rates

Constant-currency adjusted diluted earnings per share

Adjusted net income is reconciled from net income from continuing operations which is the most comparable GAAP measure. Refer to Adjusted net income table for more information.

We define constant-currency Adjusted net income margin as constant-currency Adjusted net income as a percentage of constant-currency net revenues.

* Not meaningful

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Critical Accounting Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the related notes. Critical accounting estimates refers to those assumptions and approximations that may have a material impact on the amounts reported in the consolidated financial statements and the related notes due to the level of subjectivity involved in developing the estimate.

We believe that the following discussion addresses our critical accounting estimates, which are those that are most important to the portrayal of our financial condition and results of operations and require management's most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Changes in such estimates, based on newly available information, or different assumptions or conditions, may affect amounts reported in future periods.

We summarize our critical accounting estimates and assumptions below.

Sales returns and allowances .   Revenue is recorded net of an allowance for estimated returns, discounts and retailer promotions and other similar incentives. We recognize allowances for estimated returns in the period in which the related sale is recorded. These estimates are calculated based on a history of actual returns, estimated future returns and information regarding retailer inventory levels. In addition, allowances for estimated returns may be established for significant future known or anticipated events. The types of known or anticipated events that are considered, and will continue to be considered, include the financial condition of our customers, store closings by retailers, changes in the retail environment and our decision to continue to support new and existing products. We recognize allowances for estimated discounts, retailer promotions and other similar incentives at the later of the period in which the related sale is recorded or the period in which the sales incentive is offered to the customer. These estimates are calculated using the most likely amount method. Under this method, certain forms of variable consideration are based on expected sell-through results, which requires subjective estimates. These estimates are supported by historical results as well as specific customer and product-specific facts and circumstances related to the current period. The determination of sales allowances is considered a critical accounting estimate because significant judgment is required to estimate sales volume and demand. Actual allowances may differ from estimates due to changes in sales volume based on wholesale customer or consumer demand and changes in customer and product-specific circumstances.

Inventory valuation.   We value inventories at the lower of cost or net realizable value. In determining inventory net realizable value, substantial consideration is given to the expected product selling price. We estimate expected selling prices based on our historical recovery rates for sale of slow-moving and obsolete inventory and other factors, such as market conditions, expected channel of disposition, and current consumer preferences. We record an adjustment to inventory when future estimated selling price is less than cost. The determination of inventory net realizable value is considered a critical accounting estimate because significant judgment is required to evaluate whether there will be future demand for inventories held as well as the prices at which our wholesale customers and retail consumers are willing to pay for these inventories. Estimates may differ from actual results due to changes in resale or market value, avenues of disposition, consumer and retailer preferences and economic conditions.

Impairment . Upon acquisition, we estimate and record the fair value of purchased intangible assets, which primarily consist of trademarks and customer relationships. Goodwill and certain other intangible assets deemed to have indefinite useful lives, including trademark intangible assets, are not amortized, but are assessed for impairment at least annually. Finite-lived intangible assets are amortized over their respective estimated useful lives and, along with other long-lived assets, are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying values may not be fully recoverable.

We review goodwill and indefinite-lived intangible assets for impairment annually, or more frequently as warranted by events or changes in circumstances which indicate that the carrying amount may not be recoverable. Annual testing is performed in the fourth quarter of the fiscal year for all indefinite-lived assets and reporting units except for the Beyond Yoga ® indefinite-lived assets and reporting unit, which is performed in the third quarter.

When testing goodwill and indefinite-lived intangible assets for impairment, we have the option of first performing a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit or the indefinite-lived intangible asset is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative impairment test. For goodwill, if necessary, we perform a single step quantitative goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and record an impairment charge for the amount that the carrying amount exceeds the fair value, up to the total amount of goodwill allocated to that reporting unit. For indefinite-lived intangible assets, if necessary, we perform a quantitative impairment test by comparing the fair value of the asset with the asset's carrying amount and record an impairment charge for the difference between the fair value and carrying amount of the indefinite-lived intangible asset. For fiscal 2025, we elected to perform a qualitative assessment for the goodwill in certain of our reporting units and

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certain indefinite-lived intangible assets. This qualitative assessment included the review of certain macroeconomic factors and entity-specific qualitative factors, as of the test date, to determine if it was more-likely-than-not that the fair values of our reporting units were below carrying value.

For our other reporting units and indefinite-lived intangible assets, including Beyond Yoga ® , a quantitative assessment was performed. Determination of the fair value of a reporting unit and indefinite-lived intangible asset is based on management’s assessment, using industry accepted valuation models. Third-party valuation specialists are engaged when necessary. This determination is judgmental in nature and often involves the use of significant estimates and assumptions, which may include revenue growth rates, profit margins, operating expenses, capital expenditures, terminal value, a royalty rate and a discount rate. These estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and the amount of any such charge. Furthermore, estimating the fair value requires us to make assumptions and estimates regarding not only our future plans, but industry and other market conditions outside of our control. Given the uncertainty of global economic conditions, those estimates could be significantly different than future performance.

The Beyond Yoga ® reporting unit assets and liabilities, including the intangible assets, were established in the fourth quarter of 2021 at the fair value on the acquisition date. Based on the annual assessment in 2025, although the fair values of the Beyond Yoga ® reporting unit and the indefinite lived trademark intangible exceeded their carrying values, the fair values of the Beyond Yoga ® reporting unit and the indefinite lived trademark intangible were less than 10% over their carrying values. As our long-term strategies change, planned business performance expectations are not met over time, or specific valuation factors outside of our control, such as discount rates, change significantly, then the estimated fair values of the reporting unit, the intangible assets, or both might continue to decline and lead to additional impairment charges in the future. Several factors could impact the Beyond Yoga ® brand's ability to achieve expected future cash flows, including the success of retail store and international expansion, store and e-commerce productivity, the impact of promotional activity, continued economic volatility and potential operational challenges related to macroeconomic factors and other strategic initiatives to drive increased profitability. Given that fair value is less than 10% greater than carrying value, if profitability trends decline over time from those that are expected, it is possible that an interim test, or our annual impairment test, could result in additional impairment of the related assets. Our other reporting units and intangible assets, primarily related to the 1985 acquisition of the Company by Levi Strauss Associates Inc., had substantial fair value in excess of carrying value.

For further discussion of the methods used and factors considered in our estimates as part of the impairment testing for goodwill and intangible assets, see Note 1: Significant Accounting Policies - Goodwill and Intangible Assets to our consolidated financial statements included in this report. For further discussion of the impairment charges taken in 2024 and 2023, see Note 4: Goodwill and Other Intangible Assets to our consolidated financial statements included in this report.

Income tax.   Significant judgment is required in determining our global income tax provision; therefore, the determination of our income tax provision is considered a critical accounting estimate. In the ordinary course of a global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Some of these uncertainties arise from examinations in various jurisdictions and assumptions and estimates used in evaluating the need for a valuation allowance.

We are subject to income taxes in the United States and numerous foreign jurisdictions. We compute our provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for net operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. Significant judgments are required in order to determine the realizability of deferred tax assets. In assessing the need for a valuation allowance, we evaluate all significant available positive and negative evidence, including historical operating results, estimates of future taxable income and the existence of prudent and feasible tax planning strategies. Changes in the expectations regarding the realization of deferred tax assets could materially impact income tax expense in future periods.

We continuously review issues raised in connection with all ongoing examinations and open tax years to evaluate the adequacy of our tax liabilities. We evaluate uncertain tax positions under a two-step approach. The first step is to evaluate the uncertain tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon examination based on its technical merits. The second step is, for those positions that meet the recognition criteria, to measure the tax benefit as the largest amount that is more than fifty percent likely of being realized. We believe our recorded tax liabilities are adequate to cover all open tax years based on our assessment. This assessment relies on estimates and assumptions and involves significant judgments about future events. To the extent that our view as to the outcome of these matters changes, we will adjust income tax expense in the period in which such determination is made. We classify interest and penalties related to income taxes as income tax expense.

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Recently Issued Accounting Standards

See Note 1 to our audited consolidated financial statements included in this report for recently issued accounting standards, including the expected dates of adoption and expected impact to our consolidated financial statements upon adoption.

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