In a retail landscape increasingly dominated by fast fashion and digital-first brands, Levi Strauss & Co‘s (NYSE:LEVI) recent earnings report signals a noteworthy shift for traditional apparel companies aiming to reclaim market relevance.
Shares of Levi Strauss rallied in early trading on Friday after the company reported upbeat second-quarter results on Thursday.
The announcement came amid an exciting earnings season. Here are some key analyst takeaways.
JPMorgan On Levi Strauss
Analyst Matthew Boss reiterated an Overweight rating, while raising the price target from $18 to $23.
Levi Strauss reported adjusted earnings of 22 cents per share, beating the consensus of 14 cents per share, with 9% "broad-based" organic revenue growth and operating margins of 8.3% above Street expectations of 6.1%, Boss said in a note. "Importantly, +8.8% gross profit dollar growth in 2Q represented a +15% 2-year stack, which combined with ~50bps of SG&A leverage translated to +35% YOY EPS growth," he wrote.
Management raised their full-year adjusted earnings guidance to $1.25-$1.30 per share, higher than the Street's $1.23 per share, the analyst stated. This shows that the company's gross profits in the second quarter more than offset the full-year tariff impact of 20 basis points, he added.
Check out other analyst stock ratings.
BofA Securities On Levi Strauss
Analyst Christopher Nardone maintained a Buy rating, while raising the price target from $21 to $24.
Levi Strauss is "still in the early innings of a positive EPS revision cycle," and is poised to generate mid-single-digit sales growth and margin expansion ahead, Nardone said. The company reported a "clean" earnings beat, driven by higher sales and gross margin, he added.
This was the second consecutive quarter of high-single-digit organic sales growth, the analyst stated. The outlook for the back half of the year "could prove conservative given the momentum of the business if the macro environment holds," he further wrote.
LEVI Price Action: Levi Strauss shares were up 10.95% at $21.89 at the time of publication Friday, according to Benzinga Pro.
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