Bear of the Day: Levi Strauss & Co (LEVI)

Company Overview - Levi Strauss & Co is an American clothing company known for its denim jeans, particularly the Levi's brand, and was founded in 1853 [3] - The company re-entered public markets in 2019, trading on the New York Stock Exchange under the ticker symbol LEVI [1] Stock Performance - The stock debuted at an opening price of $22 but is currently trading below $19, indicating struggles to gain momentum over the past five years [2] - LEVI is valued at $7 billion with a Forward PE of 14, holding Zacks Style Scores of "A" in Growth, "D" in Momentum, and "C" in Value [4] Recent Earnings - In Q4, Levi Strauss reported better-than-expected earnings, beating EPS by 4%, but guided for FY25 earnings below consensus, projecting adjusted EPS between $1.20 and $1.25 compared to the $1.36 expected by analysts [5] - Revenue is expected to decline by 1% to 2% year-over-year, despite improvements in profitability with a 13.4% adjusted EBIT margin and a 61.3% gross margin [6] Earnings Estimates - Since the earnings report, analysts have lowered earnings estimates for the current quarter by 15%, from $0.33 to $0.28, and for the current year by 8%, down from $1.39 to $1.27 [7] - Projections for the next year have also been adjusted downward by 5%, now at $1.39 from $1.47 [7] Technical Analysis - The stock is trading below its IPO debut price, which is a troubling sign indicating negative growth and lack of investor confidence [8][10] - Current trading levels show the stock below the 200-day moving average at $19 but above the 50-day moving average at $17.80 [9] Summary of Challenges - Levi Strauss faces significant challenges with its stock performance, recent earnings reports, and downward revisions to earnings estimates suggesting a lack of investor confidence [10]