Levi Strauss & Co. (LEVI) on Q1 2021 Results - Earnings Call Transcript
Operator: Good day, ladies and gentlemen, and welcome to Levi Strauss & Co.'s First Quarter Earnings Conference Call for the period ending February 28, 2021. . This conference is being recorded and may not be reproduced in whole or in part without written permission from the company. A telephone replay will be available 2 hours after the completion of this call through April 15, 2021. Please use conference ID 5889497. This conference call is also being broadcast over the Internet, and a replay of the webcast will be accessible for one quarter on the company's website, levistrauss.com. Aida Orphan: Thank you for joining us on the call today to discuss the results for our first fiscal quarter of 2021. Joining me on today's call are Chip Bergh, President and CEO of Levi Strauss; and Harmit Singh, CFO. We have posted complete Q1 financial results in our earnings release on our IR section of our website, investors.levistrauss.com. The link to the webcast of today's conference call can also be found on our site. We would like to remind everyone that we will be making forward-looking statements on this call, which involve risks and uncertainties. Actual results could differ materially from those contemplated by our forward-looking statements. Please review our filings with the SEC, in particular, the Risk Factors section of the quarterly report on Form 10-Q that we filed today for the factors that could cause our results to differ. Also note that the forward-looking statements on this call are based on information available to us as of today, and we assume no obligation to update any of these statements. During this call, we will discuss non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in today's earnings release on our IR website. These non-GAAP measures are not intended to be a substitute for our GAAP results. Finally, this call in its entirety is being webcast on our IR website, and a replay of this call will be available on the website shortly. Today's call is scheduled for 1 hour, so please limit yourself to 1 question at a time to give others the opportunity to have their questions addressed. And now I'd like to turn the call over to Chip. Chip Bergh: Good afternoon, everyone, and thanks for joining us today. I'm very pleased with the pace of recovery in our business and our strong financial performance this quarter, particularly in light of a very strong pre-pandemic year ago base. The actions we've taken during the pandemic are having a positive impact on our results. We exceeded our expectations across the board despite one third of our stores in Europe being closed. Our strategies of leading with our brands, acting with a DTC-first mindset and continuing to diversify our business are working. These strategies are driving record gross margins and significant EBIT margin expansion even as we continue to invest for growth resulting in a healthier, structurally stronger business. Harmit Singh: Thanks, Chip. Good afternoon, everyone. I hope all of you, your families and loved ones are safe and healthy. We had a very strong quarter, beating our expectations despite store closures, mainly in Europe. The structural economics of our business continue to improve with ongoing and outsized digital growth, record gross margins and a reduction in base operating costs, while reallocating dollars to strategic choices that will accelerate growth. The first quarter was again profitable and generated positive operating cash flow despite the double-digit revenue decline versus prior year. And while we continue to manage our business prudently, as we operate through ongoing uncertainty, particularly in Europe, I remain convinced we will emerge from this crisis a significantly more profitable and cash-generative company with ROIC in the mid-teens and adjusted EBIT margin of at least 12%, much higher than our prepandemic margin of 10.6%. Operator: . Your first question comes from Matthew Boss of JPMorgan. Matthew Boss: Congrats on a really nice quarter, guys. So Chip, could you elaborate on the denim resurgence? I think that was the commentary that you said that you're seeing. Is this industry-wide, Levi's-specific, or maybe both? And then just any additional color that you could provide around, I think, the comment that you made was demand signals in Europe today are higher than pre-pandemic levels that you were seeing in 2019. Just any additional color around that. Chip Bergh: Sure. First, on the denim resurgence, I do believe that this is both us and industry-wide, and it's being driven by a couple of dynamics. Number one is this continuing trend towards casualization, and we've seen it here recently. Now that consumers are starting to get vaccinated and people are starting to get -- go out again, there are now occasions that people are planning for. They're going back out and they're buying denim and they're buying the brands they know and trust and are largely reaching for us. I think the other thing that's driving it, as I said in the prepared remarks, are these new fits and silhouettes. We launched this high-rise, loose fit in early 2020, just as the pandemic was happening, and it was a relatively small collection at first, and it really just took off. And so, we've expanded it and have continued to build on it. It's now been followed by all of our key competitors, and I think it is clear to say that it is a big trend, which we've led. But importantly, as consumers start thinking about going out again, it gives people a reason to go out and update their wardrobe. If the -- look now is this high-rise, loose fit jean, and that's true for both men's and women's by the way, and it gives them a reason to go out and update their wardrobe, and I think that's a big driver as well. In fact, just as a small little side story on that, our relaxed men's fits, the 550 and the 559, our 2 legacy fits that we've had for years. And literally, just a couple of years ago, we were talking about potentially discontinuing them because they were so out of style back then, and those 2 fit blocks grew 50% versus prior year in this most recent quarter. So, maybe we're heading into a new denim cycle. The last denim cycle was really started by the skinny jean, and that was over a decade ago before I joined this company. So, I think we may be looking at the start of a new denim cycle. I guess the last thing I'd say about the denim resurgence is don't forget, we have -- and not only are we the leader in denim, we have enormous opportunity in non-denim as well, and we're trying to capitalize on that. On the stronger demand signal in Europe, I think that one is pretty straightforward. Our brand is red hot in Europe, and it has continued to be despite the challenges of the pandemic, and you see that just in the business results with a third of our doors closed and our DTC business is half of our business in Europe, and they still posted relatively decent results. Their e-commerce business was up 40% in the quarter when you adjust for Black Friday, but importantly, it was up 70% in February. So, consumers are really reaching for Levi's, and I think there's just a lot of pent-up demand and wholesale customers recognize that, and as they reopen, they want to be ready for it, and we're seeing it. But I think it really does trace back to the strength of the brand overall. Operator: Our next question comes from Paul Lejuez with Citi. Paul Lejuez: I think you referenced a better mix within wholesale as a driver of gross margin improvement. I'm just curious if you could talk a little bit more about how the geographical mix, product mix, or specific retailer mix was really the driver of that. And also, sorry if I missed it, but did you mention how women's and tops performed during the quarter? Harmit Singh: Sure, Paul. So, about the U.S. wholesale mix, as we got into the pandemic, strategically, we had said when we get out of the pandemic, it will be a healthier wholesale mix, where the percentage from traditional retailers, the non-digital piece will be lower, but a stronger and a higher mix from the others, which is a combination of a couple of things. One is higher and more premium product, number one. Number two, higher AURs because given the health of the inventory and given the strength of the brand, we have progressively reduced dilution across the board. We have also taken pricing. We talked about taking pricing in U.S. wholesale women’s sometime in the middle of last year and that has stuck. We started '20 with a, I think, 2% or 3% pricing increase across the U.S. wholesale, so that stuck. So -- and the ongoing partnership and the scale that we're seeing with Target is also helping. And I think as we come out of the pandemic, our focus on this, plus the fact that even with traditional retailers, we are focused on the top doors. We're also focused on building more of a lifestyle orientation. So, I think Chip referenced in his call, if you think about the top 10 wholesale accounts and quite a few of them are in the U.S., our women's business continues to grow. We grew in quarter three of last year, grew in quarter four, and continue to grow. So, your question about women, that business is doing fairly well. Tops, as a mix, company-wide is largely the same, about a fifth of our business, but if you think about Europe and in some other parts of the world, we are seeing growth in tops on a unit basis. It clearly continues to be an opportunity for us. We still sell four bottoms for every top. Our goal is to get to 1:1 at some stage, and that's embedded in our non-denim growth that we've talked about, et cetera, et cetera. So if you think about international, our direct-to-consumer business, in lots of markets, tops are at parity with bottoms. So, clearly it continues to be an opportunity. Operator: Our next question comes from Jay Sole with UBS. Jay Sole: Great. Harmit, you mentioned the impact on revenue from the store closures and the calendar shift. Can you just talk about what kind of impact those factors had on margins in the quarter? Harmit Singh: Yes. I'd say it was a headwind, largely because the average gross margins in Europe are higher than the average company gross margin and stores gross margins are higher, and we didn't recapture 100% of all the lost sales as stores have closed in Europe. So it's a -- it was a headwind, but overall, if we think of our gross margin strength, gross margins were up big time, a record gross margin. So other factors like pricing initiatives we have taken, the continued growth in AURs, and the improvement in channel and geographic mix continue to work in our favor. We also were helped by FX. In the quarter, we don't expect the FX benefit to continue. But the other factor is probably, I think, should flow through the year. I would also say, as I mentioned in the call, the record gross margins don't bank it on a full year basis because it'll adjust in quarter two, its normal seasonalization. Quarter two gross margins are about 200 basis points lower than quarter one. That's been our history. But we do think we end the year, from a gross margin perspective, much stronger than we were in '19 and '20. Jay Sole: Got it. And then maybe if I can ask one more. There's just been a lot of talk about port congestion and the Suez Canal issue. Are you seeing that impact your ability to flow inventory in a timely fashion? And is it impacting your margins this year? And would it show up more in gross margin or SG&A? Harmit Singh: Yes. So we're watching this carefully, the potential bottlenecks in the supply chain. We have experienced delays, but the good news for us because geographically, we have a portfolio and we have a brand that's really strong. We've been able to offset the impact of the delay both in quarter two, and we think we can in -- sorry, quarter one, and we think we can offset that in quarter two. In terms of cost, as I mentioned in the last quarter, we negotiated capacity and that allowed us -- is allowing us to offset some of the increases that we can see. We have had to increase our air freight. But given the strong gross margins we had overall, I think that's again being offset, at least in the short term. Longer term, we are seeing inflationary pressures, but we feel good about 2021, largely because our product prices are locked in, our broader fulfillment cost prices are locked in. As we -- and as we think about 2022 and beyond, given the price increases we have taken and where we are on pricing, we think, as a brand, we have the opportunity -- we have the pricing power as evident by the initiatives we have taken on pricing, as also evidenced by the strength of the brand that Chip indicated and our market leadership position. So I think, overall, we should be fine in '21, and we'll offset any inflation we see in '22 with pricing. Operator: Our next question comes from Omar Saad with Evercore. Omar Saad: Chip, I wanted to follow up on one of your opening comments. It sounded like you said you're seeing a more engaged and active consumer, not just before the pandemic, but a period that goes back even farther. I wanted to see if you could clarify and elaborate there. And then on the inventory, do you have the supply chain and inventory in the -- coming through the chain to meet that kind of exuberant demand as we continue to reopen globally? Chip Bergh: Yes. So from a consumer demand standpoint and just the comment about it being even stronger than what we had seen immediately before the prepandemic, I think what we're seeing is a combination of a lot of pent-up demand from people being stuck at home and hunkered down and not really doing a lot of shopping, combined with an exuberance from the economic stimulus here in the U.S., vaccination rates, people feeling more comfortable about going out and these new denim trends that we have established. And I think it's really a combination of all of those things, Omar. As I said in the prepared remarks, I feel much more confident today than I did even a month ago about our ability to come through this pandemic in a much stronger position and really seeing lift off. Your question about inventory, it is probably, and I'm sure you'll hear this from others as you talk around the horn during earnings season, I think it's the biggest challenge we're all facing is what we're seeing here recently sustainable for the next 6 or 12 months or is it a pop in the arm, and it goes back to something that looks more like the immediate prepandemic period. And so we're trying to be very balanced. I think that was the word Harmit used as we provide our outlook and as we forecast the second half of the year. On the one hand, there is good reason to believe that demand is going to be very, very strong. And as we said, we think our fourth quarter will be ahead of 2019. But on the other hand, a week ago, the director of the CDC was saying be careful folks because there could be another wave. And so we're trying to take all of this into consideration and be as balanced as we can as we think about our second quarter and then the second half of the year, and that's what's reflected in our guidance. If it turns out to be much stronger, we'll put a ton of pressure on our supply chain to be able to chase. And I think we're well positioned to do that because many of the products that we're selling are core replenishment products where we always have the fabric on hand, and we can fire that engine up pretty quickly and the more seasonal things. We've got flexibility of F.L.X. and other things like that to address unexpected higher demand beyond what we've built in the forecast. Operator: Our next question comes from Bob Drbul with Guggenheim. Robert Drbul: Just a couple of questions for me. Just the first one is, can you talk a little bit more about China in terms of how you feel you're performing. It sounded pretty good. And I'm just curious if you could maybe give us a little bit of thought around your cotton sourcing strategies, particularly in China. That's my first question. Harmit Singh: Sure. Go ahead, Chip. Chip Bergh: Yes. Let me take that, Harmit. So first of all, let me talk to the commercial aspects of our business in China. This remains a huge opportunity for us, as you all know. It's only 2% to 3% of our total global revenue. And our story in China is one of a turnaround. But we're very encouraged with the recent trends. China posted strong growth, as we expected, versus Q1 2020, where they were impacted by the pandemic. And we're seeing great results with fewer doors versus a year ago. So we're continuing to transform our business in China. We are moving more and more towards a company-operated footprint. As we said in the prepared remarks, our beacon store, which we opened in Wuhan just a couple of months before the pandemic started, is emerging really strong. It's back to prepandemic revenue levels, and we're really excited about that. So we think we're making good progress there. We've got a great team and now some continuity on that team and see nothing but upside. And over time, we believe that, that business mix is going to shift to about 70% DTC and 30% franchise. On the Xinjiang cotton situation, I guess I would say a couple of things. First, it is an extremely complicated situation, and we are watching it very, very closely. We do not source any products in Xinjiang nor do we have any relationship with fabric mills in Xinjiang. And it's in good part because we have, for 30 years, have what we call our terms of engagement, where we prohibit forced labor anywhere in our supply chain. We also insist with our suppliers the ability to audit our suppliers on an unannounced basis. Neither one of those things have any supplier in Xinjiang ever agreed to. So for more than a decade, we have not been doing any business in Xinjiang. We have not been materially impacted by the boycotts. And as I said, from a commercial standpoint, China is a big opportunity for us, and we're going to continue to operate there, consistent with our values. Robert Drbul: Great. And just as a follow-up, on the target relationship, I know you guys did the home offering this most recent quarter. Just any update on the Target relationship? What you've learned so far? And really what you've learned from the home capsule that you guys did both online and in the stores? That would be very helpful. Chip Bergh: Sure. Well, first, I'll talk about the home collaboration that we did with them, which is what they call a limited time offer. It's a onetime drop that they have done historically now for over 20 years, primarily with high-end fashion brands. So Lilly Pulitzer, Missoni, they've done this, as I said, for 20 years. We've been really pleased, and I think they would say the same thing about this collaboration. We did it primarily as a brand energy center of culture kind of moment, and it definitely did that. And hopefully, you got an opportunity to go into a Target and see what it looked like in-store. It definitely drove a lot of brand excitement. And I think it introduced the Target consumer to the Levi's brand in a way that they had never expected before. So we've been very pleased with it. But beyond that, we're really happy with our overall relationship with Target. You'll remember, we entered initially with just a 20-store test on men's. We were at 140 doors. We're now at 300 doors across men's and women's. On our way to 500 doors, which we've committed to together. We'll be in 500 doors by back-to-school. The brand continues to do really, really well there. And importantly, the Denizen brand continues to do well in Target as well. So we feel really good about the portfolio that we've got in their store, the way they're executing from in-store merchandising standpoint. We think it's been really, really good for the brand. They're selling product out the door at higher than U.S. wholesale average pricing and onwards. We're really happy with that relationship. Operator: Our next question comes from Lorraine Hutchinson of Bank of America. Lorraine Hutchinson: Chip, it sounds like you view the recent AUR gains as durable. I just wanted to get your view on the opportunity for AUR gains going forward. You said there are continued opportunities. Is that all pricing? Or are there any other strategies that you're looking to drive that metric? Chip Bergh: Well, Lorraine, I would say that we do believe that we've got continued upside from an AUR standpoint. And as Harmit indicated earlier, with the prospect of inflation coming, it's good to be in a position where you don't need a prayer meeting to take pricing. But we think we can get it a lot of different ways. Mix is important even at the store level, continuing to mix up our business in our mainline doors represents a significant opportunity. Driving down promotions, which is something we've been able to do pretty successfully over the past 2 or 3 quarters now. We pretty much walked away completely from the off-price channel, if you will, the Rosses, T.J. Maxxes of the world for flushing inventory because we've managed our inventory so well. So we are focused on growing AURs. We do think we've got continued opportunity there. We've taken price increases in the last quarter -- or in the last 2 quarters on women's. We took a $10 price increase and it's stuck. We're seeing our pricing stick when we take it. And even as you think about our assortments on parts of our business where we've been really, really successful, and I'll take T-shirts as an example. We have basically one price point of T-shirts in our stores. There is an opportunity to tier up there. So we're looking at it very aggressively, but we do think, given the strength of the brand on a global basis, we've got continued upside opportunity here. Operator: Our next question comes from Kimberly Greenberger with Morgan Stanley. Kimberly Greenberger: Really nice results here today. I wanted to ask about the 12% margin target. And Harmit, if I heard you correctly, I think you indicated that you expected to get back to 2019 levels beginning in the fourth quarter this year. I assume that would continue, I guess, through the first 3 quarters of 2022. So that 12% margin target, it sounds like it would be on track for 2022. I want to make sure, first, that I've understood you correctly on that. And then when you think about that 12% margin, are you thinking that sort of where margins are going to normalize kind of medium to longer term? Or are there other levers that you've got to raise margin beyond 2020 to something above that 12% number? Harmit Singh: Thanks, Kimberly. I was wondering when somebody would ask that, so I appreciate it. As you know, quarter one, our EBIT margins were higher than the 12%, and it's a combination of gross margins tracking at 57. SG&A going back to '19 levels, but revenue is still down 16%. Or if you adjust for things sequentially, organic revenues down high single digits. So as we think about the path to get to the 12%-plus, and the reason we are confident about it is the 3 real drivers. One, revenues returning to '19 levels. We think Q4 of '21 is the first quarter where we, as a company, holistically will have revenues higher than Q4 of '19. There are countries and there are markets that are already there, and some will get there earlier. But that's the first driver. And if that continues, which we believe it is, longer term, I think it really bodes well. The second is SG&A to '19 levels. We're already there. I think our latest perspective on the first half really talks about '19 levels of revenue even in quarter two. And I think it's a -- this is an important point because by the end of '21, we'll have 250 more doors that we are operating than the end of '19. And as you know, brick-and-mortar does add SG&A. But we've been very successful as a team and as a company reallocating dollars between the other forms of overhead and towards things that will really accelerate growth, things like digital, things like technology, things like AI, et cetera, et cetera. And the third is gross margin acceleration. And I think what we have said in the past is think of a 56 handle on a full year basis. Obviously, we can't replicate the gross margins in Q1 for a whole bunch of reasons, including FX, but I think, over time, all the actions we have taken, including the AUR question we just talked about, plus the channel mix, plus the pricing part the brand, as I think, just had improved that. Going to your question about sustainability of the 12%-plus and what's the growth algorithm. I think we can sustain the 12%-plus. In terms of what the growth algorithm is, I think let's put the pandemic behind us. Let's have a moment or 2 of what I call sustainable results, and then we'll come back and talk about what our sustainable growth algorithm is. But what I would remind everybody is even pre the pandemic, when we went public, we talked about growing our adjusted EBIT margins 20 to 30 basis points, and that was driven on the back of growth in gross margin as well as a slower growth on SG&A costs. So about the future, '22 and beyond, we'll get back to you, but we feel good about the path to get to 12%-plus. Operator: Our next question comes from Laurent Vasilescu with Exane BNP Paribas. Laurent Vasilescu: Following on Kimberly's question, Harmit, I think on recent calls, you've noted you would execute about $200 million structural cost savings, of which I think half would be reinvested. Is that still the right way to think about it? And then on the $78 million decline in SG&A for the first quarter, can you maybe parse out how much was driven by cost savings? And how do we think about the cost savings over the next three quarters? Harmit Singh: Yes. I think, Laurent, I think to your first question, the $200 million, less $100 million is broadly correct. I mean when we started 2020 prepandemic, our run rate on SG&A was higher than '19. What we did during the pandemic is we took out some structural costs, and we're reinvesting in areas that will accelerate growth, omnichannel technology, AI, new doors, et cetera. And I think the best way to think about SG&A is that there will be puts and takes on a quarterly basis, but think of us closing the year at '19 levels of SG&A. In quarter two, we will accelerate our investment in advertising and promotion because of the campaign that we talked about. But on a full year basis, we think advertising and promotion costs are about 7% of revenue, and I think that's the basis of our thinking. There is probably inflation. We are doing our best to offset inflation through productivity and cost efforts, our indirect procurement and sourcing teams are doing a phenomenal job taking costs out. And I think those are the things that give us confidence that we can keep costs in check. Operator: Our next question comes from Dana Telsey with Telsey Advisory Group. Dana Telsey: Congratulations on such nice improving results. In the past, as you've talked about the DTC channel and the split between e-commerce and stores, what's the update on the store formats, NextGen, and how you're thinking about the omnichannel initiatives there, or the ship from store, any of the other activations? Harmit Singh: Yes. So I think, Dana, what we have said about direct-to-consumer, I mean we think about last year, direct-to-consumer broadly was about 40% of our business. As we have made the strategic pivot to the 3 areas that Chip talked about with direct-to-consumer being 1 of the 3. We have said that we could grow direct-to-consumer to around 60% of our total revenue over a period of time, so we feel good about it. And as that grows, we think our own e-commerce business doubles in size. And once our e-commerce business doubles in size, we think our own e-commerce business gets to the 12% EBIT margins that we're talking about. So this quarter, because of the fact that our doors were closed largely in Europe, and Europe, as you know, has a large direct-to-consumer business. Our direct-to-consumer business was down, I think, in the mid-20s, where wholesale was down much, much less. But I think structurally, longer term, we feel good about growing our direct-to-consumer business because we're making efforts on expanding omnichannel. We've done a ton in the U.S. on omnichannel, BOPIS, I think you've talked about, think about loyalty, think about the app that we have launched, et cetera. We're in the process of scaling that now across Europe. Ship for store -- from store is what we launched during the pandemic. It's across the U.S. and now markets in Europe are deploying it. For example, in the next month, Belgium, Netherlands, Spain, France, will all have ship from store. So we're really focused on expanding omnichannel globally. That's going to take some technology dollars. We've got that in our capital forecast. But where it really makes a big difference is the direct engagement with our consumer. And we -- especially the younger consumer, and we think that really bodes well for the brand longer term. Dana Telsey: Great. And then, Chip, just to follow-up on -- you had Target, obviously, and the new home collection. You've had collaborations that have been successful. What should we be looking for in either the next few quarters in terms of activations for the brand? Any collaborations, new products that we should be watching? Chip Bergh: We do have a number of collaborations coming. Just in this last quarter, we had more than 10 different either regional or global collaborations. In fact, the Pokémon launch, which was back in February, was one of our strongest collaborations of all time, and it drove 20% of our app revenue in February. So these collaborations, the way I've talked about them before, is they bring a lot of heat to the brand. And they drive a lot of interest, but most of them are relatively small in terms of volume and revenue, but they just drive a ton of excitement and interest. There's one, in particular, and I -- that I think should be on everybody's radar for the second quarter, and that is our second collaboration with Valentino. So we're launching 517 units of Levi's Valentino Vintage 517, but we're also doing 5,107 units of a reedition of the 517, which is a replica of the original vintage orange tab 517 jeans, both adorned with co-branded patches and interiors with Valentino. The reedition 517 is now live online for preorder. We talked about premiumizing the brand. It's a unisex jeans. It's going to be sold at Saks, Neiman Marcus, Bergdorf, Luisaviaroma. Saks has already sold out of this collaboration at a preorder price of $990 per pair. So it's another example of -- it's not a ton of units, but it's going to bring a ton of excitement and heat, and it's just another way to continue to premiumize the brand. I guess we'll end it there. We're right at 3:00-or-so West Coast time. And I want to thank you all for dialing in, and we look forward to talking to you again on our Q2 earnings call in a couple of months. Thanks very much, everyone. Harmit Singh: Thank you. Stay safe and healthy. Operator: Thank you. This concludes today's conference call. Please disconnect your lines at this time.
Levi Strauss & Co. (NYSE:LEVI): A Deep Dive into Its Financial Health and Growth Prospects
- Levi Strauss & Co. (NYSE:LEVI) has experienced a slight stock decline of approximately 1.63% over the past 30 days, indicating potential entry points for investors.
- The company boasts a strong growth potential with a projected stock price increase of 26.07%, making it an attractive option for long-term investors.
- LEVI's financial health is solid, with a Piotroski Score of 8, suggesting efficient operations and strong fundamentals.
Levi Strauss & Co. (NYSE:LEVI) is a globally recognized apparel company known for its iconic denim jeans. Founded in 1853, the company has a rich history and a strong brand presence worldwide. Levi's operates in the apparel industry, competing with other major brands like Wrangler and Lee. The company is known for its innovation in denim and commitment to sustainability.
Over the past 30 days, LEVI's stock has seen a slight decline of approximately 1.63%. This downturn has been more pronounced in the last 10 days, reflecting the monthly loss. Such fluctuations are not uncommon in the stock market and can present strategic entry points for investors looking to capitalize on potential rebounds.
LEVI's growth potential is notable, with a projected stock price increase of 26.07%. This suggests that the stock could recover strongly from its current position. Investors often look for stocks with significant upside potential, and LEVI's growth prospects make it an attractive option for those seeking long-term gains.
The company's financial health is underscored by a Piotroski Score of 8. This score indicates strong fundamentals and efficient operations, which are crucial for sustained growth. A high Piotroski Score is often seen as a positive indicator for investors, as it reflects a company's ability to manage its finances effectively.
Analysts have set a target price of $22 for LEVI, aligning with its growth potential. This target price suggests a promising return on investment for those who take advantage of the current price dip. Additionally, LEVI has recently touched a local minimum, which often signals a potential reversal in trend, making it an opportune moment for investors to consider adding LEVI to their portfolios.
Levi Strauss & Co. (NYSE:LEVI) Stock Analysis: A Deep Dive into Financial Health and Growth Prospects
- Levi Strauss & Co. (NYSE:LEVI) has seen a significant increase of approximately 6.51% over the past month, indicating strong investor confidence.
- The company's stock price growth potential is pegged at 26.80%, highlighting its room for further appreciation and attractiveness to growth-oriented investors.
- LEVI's robust financial health is underscored by its Piotroski Score of 8, reflecting strong fundamentals including profitability, liquidity, and operational efficiency.
Levi Strauss & Co. (NYSE:LEVI) is a globally recognized apparel company, best known for its iconic denim jeans. Founded in 1853, the company has a rich history and a strong brand presence worldwide. Levi's operates in the highly competitive fashion industry, facing competition from brands like Wrangler, Lee, and Diesel. Despite the competition, Levi's has maintained its market position through innovation and brand loyalty.
Over the past month, LEVI has seen a significant increase of approximately 6.51%, reflecting strong investor confidence and positive market sentiment. This upward trend is noteworthy, especially in a competitive industry. However, in the last 10 days, the stock experienced a slight decline of about 1.81%. This short-term dip might offer a strategic entry point for investors aiming to benefit from potential rebounds.
LEVI's growth potential is underscored by its stock price growth potential of 26.80%. This indicates that the stock has room to appreciate further, making it an attractive option for growth-oriented investors. The company's ability to innovate and adapt to market trends contributes to this optimistic outlook, positioning it well for future growth.
Financially, LEVI is robust, as evidenced by its Piotroski Score of 8. This score highlights the company's strong fundamentals, including profitability, liquidity, and operational efficiency. A high Piotroski Score is a positive indicator of financial health, suggesting that LEVI is well-managed and financially stable.
Analysts have set a target price of $22 for LEVI, indicating potential upside from its current levels. This target reflects confidence in the company's ability to deliver value to shareholders. Additionally, LEVI has recently touched a local minimum, suggesting a potential rebound. This technical indicator, combined with its strong fundamentals, makes LEVI an intriguing prospect for investors.
Levi Strauss & Co. (NYSE: LEVI) Surpasses Earnings Expectations
- Levi Strauss & Co. (NYSE: LEVI) reported an EPS of $0.38, beating the estimated $0.28.
- The company generated revenue of approximately $1.53 billion, slightly below the forecast but showed growth driven by the U.S. market.
- Levi Strauss maintains a positive financial outlook, with a P/E ratio of approximately 25.44 and a price-to-sales ratio of about 0.84.
Levi Strauss & Co. (NYSE: LEVI) is a renowned name in the apparel industry, known for its iconic denim products. The company operates globally, with a strong presence in the U.S. market. Levi Strauss competes with other major apparel brands like Gap Inc. and VF Corporation. On April 7, 2025, Levi Strauss reported earnings per share (EPS) of $0.38, surpassing the estimated $0.28, showcasing its strong financial performance.
The company generated revenue of approximately $1.53 billion, slightly below the estimated $1.54 billion. Despite this, Levi Strauss reported an increase in revenue for the fiscal first quarter, driven primarily by strong performance in the U.S. market. This growth is attributed to consistent demand for its denim products, even amid a challenging economic environment.
Levi Strauss has maintained its financial outlook for the year, demonstrating confidence in its ability to navigate challenges. The company's resilience is attributed to a diverse supply chain, which has helped mitigate the impact of trade tensions affecting the footwear and apparel sectors. However, it is important to note that Levi Strauss's guidance does not account for the potential impact of higher tariffs.
The company's ongoing transformation strategy is proving effective, as highlighted by its robust start to the year. Levi Strauss's financial results exclude approximately $67 million of net revenues related to Dockers®. Michelle Gass, President and CEO, expressed confidence in the company's strategy, highlighting the positive outcomes achieved in the first quarter.
Levi Strauss's financial metrics provide insight into its market position. The company has a price-to-earnings (P/E) ratio of approximately 25.44, indicating the price investors are willing to pay for each dollar of earnings. The price-to-sales ratio stands at about 0.84, suggesting that investors are paying $0.84 for every dollar of sales. The enterprise value to sales ratio is around 1.08, reflecting the company's total valuation compared to its sales.
Levi Strauss & Co. (NYSE: LEVI) Surpasses Earnings Expectations
- Levi Strauss & Co. (NYSE: LEVI) reported an EPS of $0.38, beating the estimated $0.28.
- The company generated revenue of approximately $1.53 billion, slightly below the forecast but showed growth driven by the U.S. market.
- Levi Strauss maintains a positive financial outlook, with a P/E ratio of approximately 25.44 and a price-to-sales ratio of about 0.84.
Levi Strauss & Co. (NYSE: LEVI) is a renowned name in the apparel industry, known for its iconic denim products. The company operates globally, with a strong presence in the U.S. market. Levi Strauss competes with other major apparel brands like Gap Inc. and VF Corporation. On April 7, 2025, Levi Strauss reported earnings per share (EPS) of $0.38, surpassing the estimated $0.28, showcasing its strong financial performance.
The company generated revenue of approximately $1.53 billion, slightly below the estimated $1.54 billion. Despite this, Levi Strauss reported an increase in revenue for the fiscal first quarter, driven primarily by strong performance in the U.S. market. This growth is attributed to consistent demand for its denim products, even amid a challenging economic environment.
Levi Strauss has maintained its financial outlook for the year, demonstrating confidence in its ability to navigate challenges. The company's resilience is attributed to a diverse supply chain, which has helped mitigate the impact of trade tensions affecting the footwear and apparel sectors. However, it is important to note that Levi Strauss's guidance does not account for the potential impact of higher tariffs.
The company's ongoing transformation strategy is proving effective, as highlighted by its robust start to the year. Levi Strauss's financial results exclude approximately $67 million of net revenues related to Dockers®. Michelle Gass, President and CEO, expressed confidence in the company's strategy, highlighting the positive outcomes achieved in the first quarter.
Levi Strauss's financial metrics provide insight into its market position. The company has a price-to-earnings (P/E) ratio of approximately 25.44, indicating the price investors are willing to pay for each dollar of earnings. The price-to-sales ratio stands at about 0.84, suggesting that investors are paying $0.84 for every dollar of sales. The enterprise value to sales ratio is around 1.08, reflecting the company's total valuation compared to its sales.
Levi Strauss & Co. (NYSE:LEVI) Quarterly Earnings Preview
- Analysts expect Earnings Per Share (EPS) to be $0.28, a slight increase from the previous year's $0.26.
- Projected revenue is approximately $1.54 billion, slightly down from $1.56 billion a year earlier.
- The company offers an annual dividend yield of 3.60%, with a quarterly dividend of $0.13 per share.
Levi Strauss & Co. (NYSE:LEVI) is a well-known American clothing company, famous for its denim jeans. The company is set to release its quarterly earnings on April 7, 2025. Analysts expect the earnings per share (EPS) to be $0.28, a slight increase from the previous year's $0.26. The projected revenue is approximately $1.54 billion, slightly down from $1.56 billion a year earlier.
Despite the anticipated revenue decline, Levi Strauss has shown resilience in its financial performance. In the previous quarter, the company reported earnings of $0.50 per share, surpassing the consensus estimate of $0.48. The quarterly sales reached $1.84 billion, exceeding the expected $1.728 billion, as highlighted by Zacks Investment Research. However, the stock price experienced a 13.7% decline, closing at $14.44.
Levi Strauss offers an annual dividend yield of 3.60%, with a quarterly dividend of $0.13 per share. This totals $0.52 annually. Investors seeking $500 monthly from dividends would need to invest around $166,623 in Levi stock. The company's price-to-earnings (P/E) ratio is approximately 26.18, while the price-to-sales ratio is about 0.86, indicating the market's valuation relative to its revenue.
The company's financial health is supported by a debt-to-equity ratio of 1.12, suggesting a moderate level of debt compared to its equity. Levi Strauss also maintains a current ratio of 1.42, reflecting its ability to cover short-term liabilities with its short-term assets. The enterprise value to sales ratio is around 1.10, and the enterprise value to operating cash flow ratio is approximately 7.81, indicating efficient cash flow management.
Levi Strauss & Co. (NYSE:LEVI) Quarterly Earnings Preview
- Analysts expect Earnings Per Share (EPS) to be $0.28, a slight increase from the previous year's $0.26.
- Projected revenue is approximately $1.54 billion, slightly down from $1.56 billion a year earlier.
- The company offers an annual dividend yield of 3.60%, with a quarterly dividend of $0.13 per share.
Levi Strauss & Co. (NYSE:LEVI) is a well-known American clothing company, famous for its denim jeans. The company is set to release its quarterly earnings on April 7, 2025. Analysts expect the earnings per share (EPS) to be $0.28, a slight increase from the previous year's $0.26. The projected revenue is approximately $1.54 billion, slightly down from $1.56 billion a year earlier.
Despite the anticipated revenue decline, Levi Strauss has shown resilience in its financial performance. In the previous quarter, the company reported earnings of $0.50 per share, surpassing the consensus estimate of $0.48. The quarterly sales reached $1.84 billion, exceeding the expected $1.728 billion, as highlighted by Zacks Investment Research. However, the stock price experienced a 13.7% decline, closing at $14.44.
Levi Strauss offers an annual dividend yield of 3.60%, with a quarterly dividend of $0.13 per share. This totals $0.52 annually. Investors seeking $500 monthly from dividends would need to invest around $166,623 in Levi stock. The company's price-to-earnings (P/E) ratio is approximately 26.18, while the price-to-sales ratio is about 0.86, indicating the market's valuation relative to its revenue.
The company's financial health is supported by a debt-to-equity ratio of 1.12, suggesting a moderate level of debt compared to its equity. Levi Strauss also maintains a current ratio of 1.42, reflecting its ability to cover short-term liabilities with its short-term assets. The enterprise value to sales ratio is around 1.10, and the enterprise value to operating cash flow ratio is approximately 7.81, indicating efficient cash flow management.
Levi Strauss Reviews Dockers Brand for Potential Sale, Lowers Annual Revenue Forecast
Levi Strauss (NYSE:LEVI) announced that it is exploring strategic alternatives for its Dockers brand, including a potential sale, while also lowering its full-year revenue forecast, which sent its shares down more than 11% intra-day today.
The company said the decision to review the Dockers brand is part of its efforts to address underperformance in certain areas. However, Levi Strauss clarified that there is no set timeline for the review and no guarantee it will lead to a sale or specific outcome.
Since its launch in 1986, Dockers has been known for popularizing khaki and business casual attire, but the brand has struggled recently, posting a 15% decline in revenue year-over-year for the third quarter.
In addition to the brand review, Levi Strauss revised its annual sales forecast, now expecting revenue growth of just 1%, down from a previous projection of 1% to 3%. The company anticipates mid-single-digit revenue growth in the current quarter.
During a post-earnings call, Chief Financial Officer Harmit Singh attributed the reduced guidance to challenges faced by Dockers, as well as weaker-than-expected performance in wholesale markets in China and Mexico.
Despite the hurdles, Singh expressed confidence in the company’s efforts to address these issues, noting that improvements are beginning to take shape as Levi Strauss moves into the fourth quarter.
For the third quarter, Levi Strauss reported adjusted earnings of $0.33 per share on revenue of $1.52 billion, slightly beating Wall Street’s earnings expectation of $0.31 per share but falling short of the $1.55 billion revenue estimate.
