Levi Strauss & Co. (LEVI) is set to report its second-quarter earnings on Thursday, July 10. The company’s upcoming quarterly results may show the effects of supply chain issues, shifting consumer spending, rising costs due to inflation, and tariff headwinds. Despite this, analysts are highly bullish on LEVI stock, pointing to the company’s resilience and strong position in the market.
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What to Expect from Levi’s Q2 Earnings
Wall Street analysts expect Levi Strauss to report second-quarter earnings per share (EPS) of $0.13, reflecting a year-over-year decline of more than 18%. Revenue estimates for Q2 stand at $1.37 billion, according to the TipRanks Analyst Forecasts page, down from $1.5 billion in the previous quarter.
In its last earnings call, management highlighted that the fiscal second quarter is usually the weakest in terms of both revenue and profit margins. However, they also noted that tariffs are expected to have only a minimal impact on margins this quarter.
On the positive side, the company’s performance may have gotten a boost from its strong brand and growing omnichannel efforts. The company has been expanding features like Buy Online, Pick Up In Store, line queuing, same-day delivery, mobile checkout, and contactless return options. All of these are aimed at creating a more seamless shopping experience across online and physical stores.
BofA Stays Bullish on LEVI Stock
Last month, Bank of America’s four-star-rated analyst Christopher Nardone reiterated his Buy rating on LEVI stock and raised his price target from $20 to $21. Notably, his updated target implies nearly 10% growth from current levels, above the average analyst consensus growth estimate of 1.5%.
Nardone expects the company to post slightly higher earnings per share (EPS) of $0.14 compared to the consensus estimate. He also believes Levi is on track to gain market share, with its wholesale segment becoming less of a drag. The upcoming quarter will be key in proving this turnaround story.
Moreover, he pointed out that the company is also in a good position to handle tariffs because it doesn’t depend heavily on shipments from China and has a diverse global supply chain. Its strong brand also gives it flexibility with pricing.
Is LEVI a Good Stock to Buy Now?
According to TipRanks, LEVI stock has received a Strong Buy consensus rating, with eight Buys and two Holds assigned in the last three months. The average Levi stock price target is $19.40, suggesting a potential upside of 1.5% from the current level.
