Levi Strauss Poised For Growth With Accelerating Women's Denim Segment And Cost-Saving Initiatives: Analyst
Telsey Advisory Group analyst Dana Telsey reiterated the Outperform rating on Levi Strauss & Co (NYSE:LEVI), with an unchanged price forecast of $26.
Telsey writes that Levi Strauss is well-positioned due to a stabilizing U.S. denim market and a more streamlined business after exiting Denizen and footwear.
Strong DTC trends and an accelerating women’s denim segment are positive signs. The company is also enhancing its product assortment with a focus on new items. Additionally, Project Fuel is expected to deliver $50 million in cost savings in the fourth quarter, leading to more efficient operations.
Also Read: Levi Strauss & Co Stock Falls After Mixed Q3 Results: EPS Beat, Revenues Miss
The analyst noted that the company’s third-quarter results mirrored the second quarter, with sales slightly below market expectations (but in line with guidance) and expenses also aligning with the forecast.
The EPS upside was attributed to significantly stronger gross margins.
All three geographies reported constant currency growth for the first time since the first quarter of 2023, with DTC accelerating to double-digit growth from high-single digits in the first half, while wholesale remained down in the mid-single digits, the analyst writes.
Due to challenges in China, Mexico wholesale, and the Dockers business, the company slightly adjusted its full-year 2024 topline outlook, while guiding EPS to the midpoint of its previous range, slightly below consensus estimates.
However, challenges persist in the near term, but Telsey remains optimistic about the firm’s ongoing strength.
The company is exploring strategic options for the Dockers brand, which shows management’s focus on core areas, the analyst highlights.
Price Action: LEVI shares are trading higher by 1.21% to $19.68 at last check Friday.
Photo via Wikimedia Commons
Read Also:
Latest Ratings for LEVI
Date | Firm | Action | From | To |
|---|---|---|---|---|
Jan 2022 | Telsey Advisory Group | Maintains | Outperform | |
Jan 2022 | JP Morgan | Maintains | Overweight | |
Aug 2021 | Wells Fargo | Initiates Coverage On | Overweight |
View More Analyst Ratings for LEVI
View the Latest Analyst Ratings
Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market.
Get the latest stock analysis from Benzinga?
This article Levi Strauss Poised For Growth With Accelerating Women's Denim Segment And Cost-Saving Initiatives: Analyst originally appeared on Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.