Blue-jean maker Levi Strauss & Co. (LEVI) has reported better-than-expected financial results and raised its forward guidance, sending the stock up 6% in after-hours trading.
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The San Francisco-based company announced earnings per share (EPS) of $0.42, which was ahead of the $0.37 expected on Wall Street. Revenue in the period totaled $1.74 billion, which topped the $1.65 billion consensus view of analysts who track the company’s progress. Sales were up 14% from a year earlier.
The denim maker also lifted its forward guidance, saying it now expects full-year earnings of $1.42 to $1.48 per share, compared to Wall Street forecasts of $1.47 a share. The company anticipates its sales this year to rise between 5.5% and 6.5%, ahead of estimates that called for 5.6% revenue growth.
Levi’s income statement. Source: The Fly
Levi’s Key to Success
Management at Levi Strauss said they are benefiting from higher prices and positive foreign exchange rates. The company said in its earnings release that about half of the growth in the latest quarter came from more clothing items sold, while the other half was related to higher prices.
Levi executives also said that their forward guidance could rise further this year because it’s assuming a 20% global tariff, though U.S. President Donald Trump has set a 10% duty on clothing imports. If that 10% tariff remains, it could boost Levi’s full-year earnings by another $0.07 per share, said management.
Is LEVI Stock a Buy?
Levi stock has a consensus Strong Buy rating among 12 analysts. That rating is based on 11 Buy and one Hold recommendations issued in the last three months. The average LEVI price target of $27.36 implies nearly 40% upside from current levels. These ratings could change after the company’s financial results.
