Levi Strauss & Co. (LEVI) on Q2 2021 Results - Earnings Call Transcript
Operator: Good day, ladies and gentlemen, and welcome to Levi Strauss & Company Second Quarter Earnings Conference Call for the period ending May 30, 2021. All parties will be in a listen-only mode until the question-and-answer session at which time instructions will follow. 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 two hours after the completion of this call through July 15th, 2021, one week after call for a telephone replay. Please use the conference ID 3784584. This conference call also is 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 second fiscal quarter of 2021. Joining me on today's call are Chip Bergh, President and CEO of Levi Strauss and Harmit Singh, our CFO. We have posted complete Q2 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 certain 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 one hour. So please limit yourself to one question at a time to give others the opportunity to have their questions addressed. And now I'd like to turn over the call to Chip. Chip Bergh: Thanks Aida and good afternoon everyone. Our second quarter performance was better than we expected, reflecting broad-based strength across our business as we continue to see recovery from the pandemic. Our results reflect the enduring power of our brand in a time when consumers are seeking out authenticity from companies that reflect their own values. In addition to seeing strong denim and casualization trends, we are also benefiting from the ongoing execution of our strategic initiatives. And we are excited to see consumers returning to our stores as markets reopen with sequentially improving traffic trends. While the pandemic continues to impact our business, we are encouraged by accelerated revenue recovery in the quarter with all regions and channels growing versus prior year and compared to Q2 2019 reported revenues are down only three points. The recovery was led by the U.S. and sales exceeded Q2 2019 levels in more than 10 markets across the globe, including China. Harmit Singh: Thanks Chip. Good afternoon everyone. I hope all of you, your families, and loved ones are returning back to the new norm as economies recover, the vaccination pace accelerates globally, and consumer demand for apparel improves. The momentum of our business continues to accelerate as we significantly outperformed our revenue and profit expectations in the quarter. The structural economics of our business has sustainably improved versus 2019 and I am confident of achieving our adjusted EBIT margin target of 12%-plus. I'll share more on guidance in a few moments, but we are thrilled that the recovery is happening faster than we thought. And we are now poised to deliver total company growth versus 2019 in quarter three, a full quarter earlier than previously expected. And that's even before we are firing on all cylinders given store traffic and tourism have not yet fully recovered. As I walk you through our second quarter results, my comments will reference constant currency comparisons on a year-over-year basis in U.S. dollars unless I indicate otherwise. Where meaningful, I will also share comparisons to 2019. Second quarter net revenues of $1.3 billion grew 148% compared to second quarter 2020 and adjusted diluted earnings per share was $0.23, both exceeding our guidance. Compared to second quarter of 2019, constant currency revenues were down only 4%, a sequential improvement in sales and adjusted diluted EPS was significantly ahead of 2019, driven by improved structural economics of the business. Let me share some color on the detail. Despite an increasing number of markets opening, our e-commerce business, which represents 8% of our total revenues, grew 37% in the second quarter compared to prior year. We are really pleased with this given we are lapping strong growth. Compared to second quarter 2019, our e-commerce business has grown 71%. Total digital ecosystem sales growth also accelerated to 68% over prior year and represented 23% of sales in quarter two and compared to second quarter 2019, our total digital business has nearly doubled. DTC brick-and-mortar is still recovering, given many markets have not fully reopened. We are seeing traffic return and importantly our key performance metric at retail remains strong. Compared to quarter two 2019, global wholesale was down only 2% and U.S. wholesale was up by 6%. Importantly, U.S. wholesale gross margin and profitability is the strongest it has been in a while. Operator: Thank you. Our first question comes from the line of Matthew Boss of JPMorgan. Your line is open. Matthew Boss: Thanks and congrats on another great quarter. Chip Bergh: Thanks Matt. Matthew Boss: So, maybe, Chip, in light of the global momentum, could you elaborate on current trends in the denim category and just your confidence in sustainability of this strength as we think about pent-up demand? I know you've talked about size profile changes, maybe that relative to the fashion and silhouette fit drivers of a potential multi-year denim cycle that I think you point first on last call. Chip Bergh: Yes. Well, I think -- with one more quarter underneath our belt, I think we are -- we can confidently say that we're in the early innings of a new denim cycle. I've got a lot of confidence in the sustainability and our ability to continue the momentum that we've seen through this quarter. The strong results reflect an industry-wide denim resurgence. It is being driven by several things. One is the continuation of the casualization trend. And I would say that that's occurring more on a global basis than just inside the U.S. As the pandemic fog lifts and more people get vaccinated to return to social activities as the lockdowns lift, people are now starting to go back to the office in many parts of the world, all of this creates a new wardrobe opportunity. And I have talked about the fact that -- this is U.S. data, but about 35% of consumers in the U.S. have changed waist sizes -- and some of it is up and some of it is down. But either way, it creates another reason for people to go out and update their wardrobe. But importantly, I do think the new silhouettes, which we've led actually before the pandemic, we launched our first kind of baggy fits, and it really took hold and then as the pandemic kind of started to happen, we just kept doubling down on it from one season to the next. But we are seeing on both the men's and women's business that these are big drivers of our business on the looser baggier fits are almost half of both men's and women's sales this past quarter. And that's a pretty significant change, especially on women's from Q2 two years ago. And as bottoms silhouette changes, it also has an impact on tops, it has an impact on footwear, and it really does present an opportunity to update people's wardrobes broadly, beyond just the denim bottoms. On top of all that, we've also talked about the importance of extending beyond denim and we saw really good results there. Some of our newer styles, such as the XX Chino, that was up 246% and our shorts offerings are up. On the women's business we've seen really good results on dresses and that has also helped quite a bit this past quarter. So, I think it's -- I think we are in the early innings of the new denim cycle driven by this new silhouette, but it's kind of a throwback to the early 1990s. I think it is fundamentally being driven by the casualization trend and it gives me a great deal of confidence as we go forward into the next couple of quarters. Matthew Boss: Great. Congrats again. Chip Bergh: Thanks Matt. Operator: Thank you. Our next question comes from Bob Drbul of Guggenheim Securities. Your question, please. Bob Drbul: Hi. Thanks. Good evening, guys. Hope you guys are well. A couple of questions -- on -- Chip, the -- I guess, can we talk a little bit about pricing just maybe if you could elaborate on pricing, are they sticking -- are the recent pricing actions sticking? How much pricing are you taking in the second half? And can you really just talk to like the sustainability of these price increases and how you guys are approaching it? Thanks. Chip Bergh: Hey, Harmit, you're on mute, I think. I think Harmit wants to answer here, Bob. Harmit Singh: Yes. Chip Bergh: Here we go. Harmit Singh: So, Bob, on pricing, as we've said in the past, we are in the early innings of pricing. We've been more proactive on the back of a brand being hot and products being relevant, as Chip talked about. Our view is you take pricing when the brand is resonating with the consumers, not when you need to. And we have taken pricing during the pandemic. It's sticking. If you look at our first half, pricing probably helped about a point on revenue and we think of the quarter, about a -- quarter two, pricing was about a point of gross margins. Thinking forward the other piece is, Chip talked about the looser baggier fits, they are higher AURs, they're better gross margins. I talked about women's piece of the business which are under penetrated and growing that has higher gross margins because we did take some pricing last year, especially in the U.S. relevant to wholesale. So, the other piece in the pricing bucket is the reduction in markdown. We are using AI, data analytics, as well as with lean inventories that we're making sure that our products are markdown appropriately, that's definitely helping AUR. You think of AUR generally across the system in quarter two, they were up about 5% and is across geographies, across channels. So, our view is that pricing is sticking. We are also prepared for any cost inflation if it happens. I talked about the fact that we've been able to negotiate our H1 cost of goods at very low single-digit inflation which is a little higher relative to the previous years. But we're more than prepared for inflation if it comes down that far. Then I think the other piece is, if you think of the industry, prices have largely been deflationary over the last two decades. And as market leaders when denim is resurging, I think it's an opportunity to lead the industry. Bob Drbul: Great. Thank you very much. Operator: Thank you. Our next question comes from Jay Sole of UBS. Your line is open. Mauricio Serna: Hi. Good afternoon. This is Mauricio Serna on behalf of Jay Sole. I wanted to ask about Europe. You mentioned that sales in May improved versus May 2019. I think, I heard like up double-digits. So, just want to understand how that number improved throughout the quarter? And, sorry, if you could also, like, say it again what you're seeing for the third quarter by region that will be very helpful. Thank you. Harmit Singh: Sure. Pre-pandemic, Europe was our strongest market. We were market leaders by mile, executing really well, growing double-digit. Before the last resurgence, the recovery in Europe was also the strongest and unfortunately countries had to go into lockdowns. And so, during the quarter, about a third of our stores were closed in Europe. As we exit the quarter, a lot of them have reopened. So, when we talked about exiting the quarter, we talked about May sales in Europe being, I believe, in the high single-digit. If you take a market like the U.K., which where retail is open, we have seen -- particularly the last two months, we have seen double-digit increase in sales. So, the -- there is the brand is very strong and largely the performance has been light only because stores have been closed. The European team has done a great job also pivoting to making the business more digital. So, I talked about the Company e-commerce business in the quarter growing close to a little over 90% and the full digital ecosystem becoming a third of the business. So, our view of the world is it's difficult to predict when and how lockdowns happen. We all heard about Japan this morning. But our view of the world is our -- execution capability of our teams on the ground, our focus on driving agility on the back of the consumer and our employees being safe and we're able to recover pretty quickly. And so that's how we're thinking about Europe and other parts of the world over the next 12 to 18 months. Mauricio Serna: Great. Thank you. Operator: Thank you. Our next question comes from Laurent Vasilescu of Exane BNP Paribas. Your line is open. Laurent Vasilescu: Good afternoon. Thanks for taking my question. Harmit, I think you mentioned that June is up mid to high single-digits. And then if I remember correctly on the 2H guide, which I think implies on two-year stack it's 4% to 5%, but that 3Q would be slower growth rate. Just trying to square away how do we think about June. It sounds like June would be the driver then there is a sequential slowdown. Just trying to understand the mechanics here. And then any thoughts on -- updated thoughts on the Target partnership as we head to back-to-school would be very helpful. Thank you very much. Harmit Singh: Great. I'll take the June and the second half question and then I'll pass on the second question on Target to Chip. Back to your question, June was a good indication of what happens when lockdowns lift. And what we're seeing is consumers come back and come back big, especially to brands that have relevant products as well as brands they can trust and you're right, the numbers in June were pretty strong. But we also feel part of that is pent-up demand, part of that is people getting back to the new norm. So, as you think of the second half of the year, our expectation, clearly higher than a quarter ago, clearly reinforcing that we not only return to growth relative to 2019, but we get to growth in Q3, which is a quarter ahead of our expectations. So, that's how we're thinking about it. The other piece to note is, there are various parts of the world that are still closed. I mean, Asia, and I just referenced Japan today, we have not won the battle against the virus yet. There is still work to be done on that front. And so it's important to ensure that that's incorporated in our outlook as we think about the next six months. Chip Bergh: Yes. On Target, Laurent, the headline thought is we continue to be really happy with that relationship. And I think if you were to ask them, they would say the same thing. We're currently in about 300 doors with Levi's Red Tab and about another almost 1,500 doors with Denizen. We are expanding the 500 Target doors in time for back-to-school. So that is already in motion. So, our Q3 results will include some distribution expansion of Levi's Red Tab to 500 Target doors. And then on top of -- and most of those doors will also have Denizen. And then Denizen will be exclusively in another 1,275 or so doors. So, total Target distribution of about 1,775 stores or so. But we will be expanding Levi's Red Tab to the 500 Target doors in time for back-to-school. Laurent Vasilescu: Great to hear. Thank you very much. Chip Bergh: You bet. Harmit Singh: Thanks Laurent. Operator: Thank you. Our next question comes from Paul Lejuez of Citigroup. Please go ahead. Tracy Kogan: Thank you. It's Tracy Kogan filling in for Paul. I was wondering if you guys could update us on any supply chain issues you're currently seeing. And maybe if supply chain issues have affected your inventory levels or constraints or demand and when you think it might improve? Thanks. Chip Bergh: Yes. We have experienced some impacts, although I would also be very quick to say that, I think we are managing through this better than most. I would say the impact to the quarter was about half a point of growth for the total company. So, kind of in the range of $7 million to $8 million in the quarter. Our expectation for the second half is there will continue to be challenges, but we're going to be airfreighting more. That's already built into our gross margin guidance which we have given. And we are working around some of the biggest challenges. There is still a challenge in Long Beach. We're now shipping most of our product into the U.S. through the East Coast. Only about 20% of our U.S. freight is coming through the West Coast right now and we've built the delays into our lead-times. So, we're fully expecting that we're going to be able to manage the back-to-school volume as that comes upon us and holiday as well. The team has done really a great job of contracting and getting guaranteed space on vessels. A lot of people are talking about not being able to get containers, not being able to get onto a ship. The team has done an extraordinary job on getting us guaranteed space, guaranteed pricing as well, which is helping us to control our costs. So, this is a big challenge for the industry. We're hearing it from a lot of our customers. We are all over it. And I think we are -- in part because we've got such a diversified supply chain, I think we're managing through this better than most. Tracy Kogan: Great. Thanks very much. Chip Bergh: You bet. Operator: Thank you. Our next question comes from Dana Telsey of Telsey Advisory Group. Your line is open. Dana Telsey: Good afternoon and congratulations on the progress. Given the improvement in margin that you've seen, how do you think about the DTC margin e-commerce versus stores? Is there improvement being seen in each of those channels and how do you think about that going forward? And then just lastly, in terms of product inflation and raw material costs, how are you planning those going forward? Thank you. Harmit Singh: Thanks Dana and thank you for the insight on CNBC today. I'd say to your question on gross margin, DTC continues to be a tailwind. Our gross margin both in stores as well as e-commerce is higher than the company average. And we have said strategically one of the pivots we made during the pandemic was that we will accelerate our direct-to-consumer business. We had -- about 40% of the business today is direct-to-consumer, but we hope to get it to about 60%. So, that clearly helps our gross margins. We also -- as I talked earlier, we're selling a lot more full-price product. We are also being very thoughtful about and disciplined about our promotions. All these factors will help. We are seeing an increase in AURs I talked about that's making a big difference. There is a piece in the gross margin side that I think may be temporary. I mean, it's small, but it's there and we called it out. I think that's why gross margin in the second half, even though 300 basis points higher than 2019, is slightly more moderated than the 670 or 500 basis points in 2019 as you've seen here. To your question about costs, given the scale that we have and given that we have wonderful partners and vendors around the world, we've been able to negotiate, I would say, cost increase on product to very low single-digit for the first half of 2022 and that gives us confidence about continuing or maintaining gross margin growth as we get into 2022. And we are seeing inflation in media cost, we're seeing inflation in fulfillment costs, we're seeing inflation in media, but manageable from our perspective. And given that our brand has pricing power, if we ever need to take more pricing, we think we can. Dana Telsey: Thank you. Operator: Thank you. Our next question comes from Kimberly Greenberger of Morgan Stanley. Your line is open. Kimberly Greenberger: Okay, great. Harmit, I wanted to ask you about the gross margin. 57% full year gross margin this year, obviously a really exceptional accomplishment. I know you called out the 100 basis points of temporary benefits here in the second quarter and I can't recall if you gave that in Q1. But if you could just take a look at the full year, out of that 57%, is there a 25 basis point or a 50 basis point sort of give-back next year? I'm just wondering what the sustainable, if we were to think about the more structural benefits you're delivering in gross margin this year versus some of the temporary ones, if you could help us understand the breakdown within the 57% target this year that would be great. Harmit Singh: Yes. Definitely we're not ready to give guidance for 2022 or talk about our growth algorithm because things are still stabilizing. But we feel good about ensuring that gross margin continues to be accretive year-over-year. We demonstrated that even last year when we were in the heart of the pandemic. I think your question, difficult to call out, Kimberly, but in this quarter we felt, probably there were temporary benefits of about 100 basis points, which annually, if you equate, it's about 20, 25 basis points. But Chip referred to us airfreighting product in the second half and we've built in that into our gross margin guidance. Our assumption is longer term we will revert back to the old norm of shipping the products so we may not need to airfreight as much. So, there are some puts and takes. As we think about the year, broadly I think registering three quarters in fashion of record gross margin just talks about how strong the brand is. And so that's what I would kind of leave you with is the thinking that we'll probably continue to grow gross margin annually. How much, that will be -- I'll probably talk to you more in a couple of months, maybe early next year when we talk about 2022. But I think the broader perspective also is our confidence of delivering a 12% EBIT margin or operating margin and growing from there beginning 2022. So, I think I'd say our view of the world is gross margin continues to be accretive. We continue to invest on things that matter, A&P, et cetera, so that does drive leverage and improve operating margins. Kimberly Greenberger: Very clear. Thank you so much. Harmit Singh: Thanks Kimberly. Operator: Thank you. Our next question comes from Lorraine Hutchinson of Bank of America. Your question please. Lorraine Hutchinson: Thanks. Good afternoon. I had a question about how you're thinking about future orders and how you're trying to strike a balance between meeting the outsized demand that you're seeing, particularly in some of these new fashion items and tops, this maintaining all this progress you've made on gross margin? So, where are you coming out in terms of planning your production and your inventory levels for the coming seasons? Harmit Singh: Yes. The -- we're doing a few things structurally that will continue to improve our inventory management. We are moving from two seasons to four. Chip talked about implementing AI-driven demand forecasting that leads to better inventory management but also ensuring that we minimize the missing sales. So, there are quite a few things. The other thing that we're doing is, we are raising the percentage of common assortments around the world, because it allows us to move inventory between countries and between affiliates. The other muscle that we have built is the muscle of chasing. Thanks to the wonderful work of our supply chain folks and operators on the ground. Now, I think we can chase more into demand as against ordering everything and keeping as values to better inventory management and obviously lower markdowns because you're not necessarily buying product before you see those trends. So, the way we think about inventory levels, Lorraine, I think the 12% decline that you've seen is not here to stay. We probably have inventory at par in Q3. And as we start planning 2022, inventory levels will probably be slightly higher mid to high single-digit. But the good news for us is, as you've seen even during the pandemic, two-thirds of our inventory is core or what we can sell from season-to-season. So, our view of the world is that we have -- we will have inventory that will allow us to grow this business. We will probably be chasing - if the recovery continues at the pace it is, we will probably be chasing demand and that's not a bad place to be. As Chip has said a couple of times, we rather lose a sale than have a lot more inventory that we'll have to markdown. Lorraine Hutchinson: Thank you. Operator: Thank you. Our next question comes from Carla Casella of JPMorgan. Your question please. Carla Casella: Hi. I'm curious you mentioned that ladies has a higher gross margin at this point. And I'm wondering what's that attributable to. Is it the mix or something else? Harmit Singh: I'd say a couple of things, Carla. In the good old days where we were not growing women's, it was dilutive to all company margins. Then we introduced a wonderful women product and had -- I don't know 15 quarters of double-digit growth. So, the product was relevant, it was resonating with her. And then we continued to innovate, introduced new styles, we took pricing. We had the volume and we leveraged the volume to drive better cost of goods sold. So, all those factors have really contributed to higher gross margins for our women's business. It's underpenetrated, so we think this will grow. And I think as it grows, it continues to be accretive. And so we think the gross margins are sustainable as we continue to grow our women's business, which today is about a third -- a little over a third of our business and will be stated publicly, our intention is to grow this to at least half our total business over time. There are countries that do it effectively today. I think Australia has a very -- has a women's business that's at par with the men's business, the other markets in Europe. So, I think it's clearly possible. Carla Casella: Okay, great. And then can I ask just one on travel? Where would you say you are in terms of travel? If you look at today versus pre-pandemic? How much more upside is there as travel reopens worldwide? Harmit Singh: Are you talking about travel as in travel expense? Carla Casella: No, sales -- tourist sales. Harmit Singh: Oh, you're talking about tourist sales. I would say tourist sales are practically non-existent. I think you've seen a little bit in Q2, but it's very small. If you think about our doors, what the teams around the world are doing a wonderful job is reaching out to more local consumers. So, I think -- and they're reaching out to a lot more younger consumers around the world to try and offset some of the tourist decline. It's difficult to predict, but I'd say, it's varied by country. Every country has a different rule for allowing tourists. You'll probably see things get back to normal, probably a year, year-and-a-half from now. But our view is that we are able to mitigate where we can. Carla Casella: Okay, that's great. Thanks a lot. Harmit Singh: Yes. Operator: Thank you. At this time, I'd like to turn the call back over to the President and CEO, Chip Bergh for closing remarks. Chip Bergh: All right. Well, thank you everyone for dialing in and for the terrific questions. We will look forward to speaking with you again at the end of our third quarter. Thanks very much and enjoy the rest of your summer. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
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.
