Levi Strauss (LEVI) Stock Forecast & Price Target

Levi Strauss & Co. demonstrated strong financial performance in its latest quarterly results, with total revenue increasing by 7% to $1.543 billion, surpassing consensus expectations. The company's operations in Asia showed significant growth, with a 12% revenue increase and an operating margin improvement of 50 basis points year-over-year, reflecting its effective regional strategy. Additionally, the Levi's tops business achieved a remarkable 16% year-over-year growth, highlighting the success of its direct-to-consumer focus and expanded lifestyle offerings, which continue to resonate well with consumers.

Levi Strauss & Co. is anticipating a 3% decrease in revenues, heavily impacted by the absence of a 53rd week of sales from the previous year, resulting in significant gross margin headwinds of 80 basis points for the fourth quarter. The company projects a 20 basis point headwind on gross margins for the full year, with expectations that operating margins will decline to 11.2%, reflecting a 110 basis point year-over-year drop, which is below consensus estimates. Ongoing external pressures, such as increased tariffs on imports, further complicate the company's outlook, contributing an anticipated 50 basis point reduction to gross margins for FY25.