Levi Strauss & Co: UBS Evidence Lab inside: 3Q26 Preview: We See A Modestly Favorable Upside/Downside Skew

UBS published a 3Q26 earnings preview on Levi Strauss & Co (LEVI.US). We forecast 3Q EPS of $0.36, in-line with the Street, but anticipate a stronger topline outlook to drive LEVI's FY26 EPS guidance 2c higher to $1.48-$1.54 excluding any potential tariff refund benefits; we also see another 4-6c of EPS upside if LEVI adjusts the tariff assumptions in its FY26 guidance lower based on current tariff rates. The risk is LEVI takes a cautious approach toward its FY26 outlook given elevated macro uncertainty, which is why we see only a moderately favorable upside/downside skew over the event. The options market prices in a +/-8.2% jump vs. a 6.8% historical average move. Sentiment leans bearish: the shares are down 15.1% over the last three months, the crowding score fell to +0.4, while short interest decreased ~60 bps to 7.2%. UBS Evidence Lab data show US site visits up 39% y/y in 3Q, key European and Asian site visits up 22% and 50%, and China GMV up 25% on average. Our PT is $34 with a