Core Viewpoint - Levi Strauss & Co. has disappointed investors by lowering its guidance for the fiscal third-quarter of 2024, leading to an initial 8% sell-off in shares, despite some positive aspects in the earnings report that were overshadowed by the negative headline metrics [1]. Financial Performance - The company reported a 2-cent EPS beat over consensus estimates of 33 cents, but revenues rose only 0.4% YoY to $1.52 billion, falling short of the $1.55 billion consensus [3]. - Net revenues in the Americas fell by 1%, while Asia's net revenues were flat YoY [3]. - Dockers brand revenues plunged by 15% as reported and 13% in constant currency [3]. - Wholesale revenue declined by 6% YoY on a reported basis and 5% in constant currency [3]. Positive Aspects - Levi's brand sales grew by 5% YoY globally, marking the highest revenue growth in two years [4]. - The company achieved a record gross margin of 60%, up 440 bps YoY, driven by lower product costs and a favorable brand mix [4][6]. - Direct-to-consumer (DTC) sales rose by 12% YoY in the U.S. and 9% in Europe, contributing to the higher gross margin [6]. Regional Performance - The Americas experienced a 1% sales decline, primarily due to exiting the Denizen business, but would have seen a 2% YoY revenue increase without this exit [5]. - Europe showed a positive trend with net revenues climbing 6% on a reported basis and 7% in constant currency [5]. Strategic Considerations - The company is considering a strategic review of the Dockers brand due to its poor performance, which may lead to divestment [7]. - CEO Michelle Gass highlighted three areas of softness: Dockers, Mexico, and China, and mentioned plans to address these challenges [10]. Guidance and Future Outlook - Levi Strauss lowered its full-year 2024 revenue guidance to $6.24 billion from $6.32 billion, and adjusted EPS estimates to a tighter range of $1.17 to $1.27, below the $1.25 consensus [8]. - The average analyst price target for the stock is $22.75, with a high forecast of $26.00, indicating a potential upside of 15.75% [4][52].

Core Insights - Levi Strauss & Co's shares fell by 7.19% to $19.545 following disappointing third-quarter earnings that did not meet Wall Street expectations [1] - The company reported a 1% decrease in sales in the Americas, influenced by the exit from the Denizen® business and underperformance of the Dockers brand, leading to potential strategic options including a sale [2] - Full-year earnings per share (EPS) guidance and revenue growth forecast were adjusted downwards, with revenue growth now projected at approximately 1% year-over-year, reduced from 1% to 3% [3] Valuation Metrics - Levi's current Price-to-Earnings (P/E) ratio is 51.43, significantly higher than its forward P/E of 13.53, indicating high growth expectations [4] - The stock price exceeds its GF Value of $18.15, suggesting it may be fairly valued at this time [4] - The Price-to-Book (P/B) ratio stands at 4.15, indicating a premium investors are willing to pay relative to the company's book value [5] Financial Health - Despite the stock decline, Levi's market capitalization remains at $7.77 billion, with investors closely monitoring the company's strategic decisions and financial health [6] - The company shows some positive signs, such as an expanding operating margin, but faces challenges including financial stress and slowed revenue growth [5]

Core Insights - Levi Strauss & Co. has seen a significant decline in its stock price, dropping by 7.45% and falling below the $20 mark [1] - The company is considering the potential sale of its Dockers brand, indicating a strategic shift [1] - Levi Strauss has projected lower-than-expected operating revenue for the fourth quarter, suggesting potential challenges ahead [1]

Financial Data and Key Metrics Changes - In Q3 2024, net revenues increased by 2% in constant currency and 3% when excluding the Denizen business, reaching $1.5 billion [6][23] - Adjusted EBIT margins expanded by 250 basis points to 11.6%, with adjusted EBIT dollars increasing by 27% [20][25] - Gross profit for Q3 was $911 million, representing a record gross margin of 60%, an increase of 440 basis points year-over-year [24][26] Business Line Data and Key Metrics Changes - The Levi's brand grew by 5% globally in Q3, marking its best quarterly growth in two years, while Dockers underperformed, declining by 13% [6][39] - Direct-to-consumer (DTC) revenues increased by 12%, with U.S. DTC also up by 12% [15][27] - Beyond Yoga saw a growth of 19%, driven by strength in wholesale and e-commerce [18] Market Data and Key Metrics Changes - The Americas region saw a 2% increase in revenues, while Europe returned to growth with a 7% increase [27][28] - Asia's net revenues increased by 4%, with significant strength in markets like Turkey and Japan, although challenges persisted in China and the Middle East [28] - The women's business outperformed, with global growth of 4% in U.S. wholesale and 11% in DTC [61] Company Strategy and Development Direction - The company is focusing on a DTC-first strategy, narrowing its focus to the Levi's brand and Beyond Yoga, while evaluating strategic alternatives for Dockers [7][39] - The overarching strategy aims to transition from a denim bottoms brand to a head-to-toe denim lifestyle brand, with significant growth in dresses and skirts [13] - A new global marketing campaign featuring Beyoncé is expected to enhance brand visibility and drive sales [11][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term potential of the Levi's brand, despite challenges in China and Dockers [8][29] - The company anticipates mid-single-digit revenue growth for Q4, driven by strong momentum in the Levi's brand and DTC channels [29][30] - Management highlighted the importance of maintaining profitability and cash flow discipline, with expectations for continued margin expansion [20][21] Other Important Information - The company returned $69 million to shareholders in Q3, including $52 million in dividends and $18 million in share repurchases [26] - Inventory levels were down 7%, with a healthy composition expected to end the year lower than the previous year [26] Q&A Session Summary Question: Can you talk about the drivers of this quarter's revenue miss and your confidence in Q4 acceleration? - Management identified foreign exchange impacts, particularly from the Mexican peso, and underperformance in Mexico and Dockers as key factors for the revenue miss, but expressed confidence in Q4 acceleration due to strong momentum in the U.S. and Europe [35][36] Question: Can you elaborate on the rationale for the Dockers evaluation? - The decision to explore strategic options for Dockers is aimed at focusing on the Levi's brand and Beyond Yoga, as Dockers has underperformed for some time [39][40] Question: What are the drivers of the 5% global growth for the Levi's brand? - The growth is driven by strong DTC performance, with 12% growth globally, and a focus on women's business, which has gained significant market share [42][45] Question: How should we think about gross margin expansion moving forward? - Management reiterated the goal of growing gross profit dollars faster than SG&A, maintaining a long-term expectation of 30 to 40 basis points of annual gross margin expansion [46][47]

Core Insights - Levi Strauss reported revenue of $1.52 billion for the quarter ended August 2024, reflecting a year-over-year increase of 0.4% [1] - The company's EPS was $0.33, up from $0.28 in the same quarter last year, indicating a positive earnings surprise of +6.45% [1] - Revenue fell short of the Zacks Consensus Estimate of $1.55 billion, resulting in a surprise of -2.25% [1] Revenue Breakdown - Geographic Revenues in the Americas were $757.20 million, down -1.2% year-over-year and below the estimated $788.87 million [3] - Geographic Revenues in Europe reached $406.60 million, up +5.9% year-over-year and exceeding the estimated $393.20 million [3] - Geographic Revenues from Other Brands were $105.90 million, down -6.9% year-over-year and below the estimated $117.63 million [3] - Geographic Revenues in Asia totaled $247.10 million, reflecting a slight increase of +0.2% year-over-year, but also below the estimated $252.10 million [3] Stock Performance - Shares of Levi Strauss have returned +12.9% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [4] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [4]

Financial Performance - Levi Strauss reported quarterly earnings of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.31 per share, and up from $0.28 per share a year ago, representing an earnings surprise of 6.45% [1] - The company posted revenues of $1.52 billion for the quarter ended August 2024, which missed the Zacks Consensus Estimate by 2.25%, and is slightly up from $1.51 billion year-over-year [2] - Over the last four quarters, Levi Strauss has surpassed consensus EPS estimates four times but has only topped revenue estimates once [2] Stock Performance - Levi Strauss shares have increased approximately 31.1% since the beginning of the year, outperforming the S&P 500's gain of 19.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.51 on revenues of $1.76 billion, and for the current fiscal year, it is $1.24 on revenues of $6.31 billion [7] Industry Outlook - The Retail - Apparel and Shoes industry, to which Levi Strauss belongs, is currently ranked in the top 41% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The performance of Levi Strauss may be influenced by the overall industry outlook, as empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions [5][8]

Core Insights - Levi Strauss & Co reported net revenues of $1.52 billion for Q3 2024, flat on a reported basis but up 2% on a constant-currency basis compared to Q3 2023, with the Levi's® brand achieving a 5% global revenue increase, the highest in two years [2][6] - The company experienced significant margin expansion, with gross margin rising by 440 basis points year-over-year to 60.0%, driven by lower product costs and a favorable channel and brand mix [3][6] - A strategic review of the Dockers® brand was announced, which may involve a potential sale or other strategic transactions, while the company reaffirmed its adjusted diluted EPS guidance for the full fiscal year 2024 [6][7] Financial Performance - Q3 2024 net revenues were $1.52 billion, compared to $1.51 billion in Q3 2023, showing no percentage change [4] - Gross profit increased by 8.5% year-over-year to $910.7 million, while net income rose by 110% to $21 million [4] - Adjusted diluted EPS increased by 18% year-over-year to $0.33, although it was slightly below the analyst estimate of $0.34 [3][4] Balance Sheet and Cash Flow - As of August 25, 2024, the company had cash and cash equivalents of $577 million and total liquidity of approximately $1.3 billion [5] - Total inventories decreased by 7% on a dollar basis, and the company returned approximately $69 million to shareholders in Q3, including $52 million in dividends and $18 million in share repurchases [5] Strategic Outlook - The company is focusing on strengthening the Levi's® brand, which saw a significant acceleration in growth, and is committed to sustaining margin improvements and revenue growth in the upcoming quarters [6][7] - The strategic review of the Dockers® brand indicates potential challenges in that segment, which investors should monitor closely [7]

Levi Strauss & Co. (LEVI) is likely to register bottom and top-line growth when it reports reports third-quarter fiscal 2024 earnings on Oct. 2, after the closing bell. The Zacks Consensus Estimate for revenues is $1.6 billion, which indicates a rise of 2.7% from the year-ago quarter's level. The consensus estimate for quarterly earnings has been stable over the past 30 days at 31 cents per share and indicates an increase of 10.7% from the year-earlier quarter's tally. The company has an average trailing fo ...

The upcoming report from Levi Strauss (LEVI) is expected to reveal quarterly earnings of $0.31 per share, indicating an increase of 10.7% compared to the year-ago period. Analysts forecast revenues of $1.55 billion, representing an increase of 2.7% year over year. Over the past 30 days, the consensus EPS estimate for the quarter has remained unchanged. This demonstrates the covering analysts' collective reassessment of their initial projections during this period. Before a company announces its earnings, it ...

Group 1 - Levi Strauss teased a potential collaboration with Beyoncé, leading to a brief increase in the brand's shares by approximately 1% [1] - The Instagram post included imagery related to Beyoncé's latest album "Cowboy Carter," which features a song titled "LEVII's JEANS," generating excitement among her fanbase, the Beyhive [2] - Denim is experiencing a resurgence in popularity, with brands like American Eagle and Abercrombie & Fitch noting this trend as a factor in revitalizing sales [2] Group 2 - Levi's second-quarter earnings in June fell short of Wall Street's sales expectations, but the company's leadership remains optimistic about the future of denim [3] - CEO Michelle Gass highlighted that the growth in denim's popularity is at an all-time high, particularly for items beyond traditional pants, such as denim skirts and dresses [3] - There has been no immediate response from Levi's representatives regarding the potential collaboration with Beyoncé [3]