Levi Strauss (LEVI) Stock Forecast & Price Target

Levi Strauss & Co. reported a notable revenue growth of 7.0% year-over-year in the fiscal third quarter, reaching $1.543 billion, which surpassed the consensus estimate of $1.499 billion. Additionally, the company's operating margin in Asia improved by 50 basis points year-over-year, underscoring operational efficiency within that region. Furthermore, Levi’s tops business experienced a significant 16% year-over-year growth, demonstrating the effectiveness of its direct-to-consumer strategy and the appeal of its expanded lifestyle offerings.

Levi Strauss & Co. is projected to experience a revenue decline of 3%, primarily due to significant headwinds from the previous year's 53rd week and the cessation of Denizen footwear, which collectively contribute 300 basis points to this decline. Furthermore, management anticipates a gross margin headwind of approximately 20 basis points for the full fiscal year, indicating further pressure on profitability, with a projected operating margin of 11.2% in Q3, down 110 basis points year-over-year. Additionally, the company expects earnings per share (EPS) to be negatively impacted by $0.02 to $0.03 in FY25, suggesting ongoing challenges in maintaining financial performance.