Levi Strauss (LEVI) Stock Forecast & Price Target

Levi Strauss & Co. demonstrated solid growth in its third quarter, with total revenue increasing by 7.0% year-over-year to $1.543 billion, surpassing consensus expectations. The company's Asia segment showed particularly strong performance, with a 12% increase in organic revenue and a notable rise in operating margin by 50 basis points to 12.0%. Additionally, Levi's tops business achieved a significant 16% year-over-year growth, highlighting the effectiveness of the company's direct-to-consumer strategy and expanded lifestyle offerings.

Levi Strauss & Co. is forecasting a 3% decline in revenues, significantly impacted by the absence of a 53rd week of sales from the previous year, alongside anticipated gross margin pressure stemming from various headwinds including foreign exchange fluctuations and the exit of Denizen footwear. The company's operating margin is projected to decrease to 11.2% in Q3 FY25, which falls below consensus expectations and reflects an overall deterioration compared to the previous year. Additionally, ongoing tariff challenges are expected to further compound gross margin pressures, contributing to an estimated 20 basis points of headwind for the full fiscal year, indicating a challenging operational environment moving forward.