Levi Strauss (LEVI) Stock Forecast & Price Target

Levi Strauss & Co. demonstrated robust financial performance in its recent quarter, with total revenue growth of 7.0% year-over-year, surpassing consensus estimates and driven by strong contributions from all regional segments, particularly Asia, which saw a remarkable 12% revenue increase. The company's operational efficiency is highlighted by an increase in the overall operating margin by 50 basis points year-over-year to 20.8%, primarily within the Levi’s Brands segment. Additionally, an impressive 16% year-over-year growth in Levi’s tops business reflects the effectiveness of the company’s direct-to-consumer strategy and enhanced lifestyle offerings, signaling a positive outlook for continued brand resonance and consumer engagement.

Levi Strauss & Co. is facing a projected revenue decline of 3%, primarily due to a significant headwind associated with the previous year's 53rd week, alongside expected pressures on gross margins and earnings per share. Moreover, management anticipates a reduction in the share of its Spacedye performance fabric, which has been a major revenue driver, while also grappling with ongoing foreign exchange headwinds and the impact of exiting the Denizen footwear line. Additionally, the company expects operating margins to decrease to 11.2% in Q3 FY25, representing a year-over-year decline and suggesting potential challenges in meeting performance expectations.