Levi Strauss beat Wall Street estimates for the second quarter and lifted its full-year profit

and sales targets, yet shares slid more than five percent in extended trading as investors weighed the upgrade against a cautious consumer backdrop. The denim maker posted adjusted earnings of 28 cents a share on revenue of $1.56 billion for the three months ended May 31, topping analyst expectations of 24 cents and $1.52 billion, according to LSEG data. Reported net income climbed to $87.3 million, or 22 cents a share, from $67 million, or 17 cents a share, a year earlier, while sales rose roughly eight percent from $1.45 billion in the same period last year.

Management raised its full-year adjusted earnings outlook to a range of $1.46 to $1.52 a share, up from a prior forecast of $1.42 to $1.48. At the high end, the new guidance sits above the $1.50 consensus compiled by LSEG. The revenue growth target was also increased to between seven percent and 7.5 percent, from a previous band of 5.5 percent to 6.5 percent, surpassing the 6.6 percent market estimate. Chief Financial Officer Harmit Singh said about half of the projected sales increase would come from higher prices and the other half from unit volume.

Chief Executive Michelle Gass told CNBC that the company’s core shopper remains resilient even as gasoline prices climb. She said roughly two-thirds of the quarter’s sales growth stemmed from unit gains rather than price alone, giving leadership confidence to boost both guidance and the dividend. Gass cited strength across the flagship Levi’s brand, the Signature value line, and the newly introduced premium Blue Tab collection.

The market reaction underscored skepticism that the momentum can hold. Despite the beat and the upward revision, the stock’s after-hours decline suggested traders are focused on the durability of discretionary spending and the risk that higher prices eventually choke off volume gains.

Investors will now watch whether the unit-driven growth Gass described can persist through the back half of the fiscal year, and whether the company’s pricing power holds if the macroeconomic environment deteriorates further.