$Levi Strauss & Co(LEVI)$ is scheduled to release its fiscal second-quarter earnings on Thursday, 10 July 2025, after the market closes, with a conference call scheduled for 2 p.m. Pacific Time / 5 p.m. Eastern Time.
Here is what to expect and the context surrounding LEVI's Q2 2025 performance:
Analyst Expectations for Q2 2025
Adjusted Earnings Per Share (EPS): Analysts anticipate adjusted EPS of approximately $0.13 per share. This would represent a significant 19% year-over-year decline compared to the $0.16 per share reported in the prior year's Q2.
Revenue: Consensus estimates for revenue are around $1.37 billion. This would be a 5% fall in sales compared to the $1.44 billion in revenue from the same quarter last year.
Organic Revenue Growth: Levi Strauss itself projected organic net revenue growth from continuing operations of 3.5%–4.5% for Q2, excluding foreign exchange headwinds and impacts from business exits (Denizen and footwear).
Gross Margin: The company expected gross margin to expand by 80–100 basis points in Q2.
Adjusted EBIT Margin: Anticipated to be in the range of 5.5-6% for the quarter.
Earnings Snapshot
EPS guidance includes a ~3¢ FX headwind and higher tax rate.
Levi Strauss & Co. (LEVI) Last Neutral Earnings Call Saw Share Price Unchanged
Levi had a neutral earnings call on 07 April 2025 which saw its share price remains relatively unchanged since.
Levi Strauss & Company reported a strong start to 2025 with notable growth in the DTC channel and international markets, supported by strategic initiatives. However, concerns over new tariffs and wholesale channel challenges present obstacles. The company's proactive approach to addressing these challenges through cost management and strategic planning indicates a balanced outlook.
Levi Strauss & Co. (LEVI) Company Guidance
During the Levi Strauss & Company First Quarter Fiscal 2025 Earnings Conference Call, the company reported a strong start to the fiscal year with a 9% increase in organic net revenue. Direct-to-Consumer (DTC) sales were a key growth driver, up 12%, while wholesale sales increased by 5%. The U.S. business grew by 8% and international markets also saw a 9% rise, contributing to the overall performance.
The company's focus on becoming a DTC-first retailer and expanding its denim lifestyle offering has driven these results. Levi's brand strength was evident with an 8% growth and market share gains in both men's and women's categories. Gross margin reached a record 62.1%, and adjusted EBIT margin expanded by 400 basis points to 13.4%. Despite the dynamic macro environment, including recent tariff announcements, Levi Strauss & Co. remains confident in its strategies and long-term growth potential.
Factors Expected to Influence Q2 Results
Seasonality: Fiscal Q2 is typically Levi Strauss's lowest revenue and margin quarter, due to seasonal factors and costs associated with inventory resets. The company reported a strong start to fiscal 2025 with high single-digit organic net revenue growth, up 9% for Q1.
Challenging Operating Backdrop: The quarter is likely to reflect continued impacts from:
Inflationary Pressures: Weighing on consumer spending for discretionary items like apparel.
Supply-Chain Disruptions: Although some improvements may be seen, these can still pose challenges. Direct-to-Consumer (DTC) channel grew by 12%, driven by positive comp growth, successful new openings, and strong e-commerce performance.
Foreign Currency Translations (FX Headwinds): Expected to be a headwind of approximately 2% on reported revenue growth. U.S. business revenue increased by 8%, while international revenue grew by 9%, with market share gains in both men's and women's segments.
Business Exits: The company's strategic decision to exit the Denizen and footwear businesses is expected to reduce revenue by about 1.5%.
Project Fuel Costs: Levi's global productivity effort, "Project Fuel," involves transitioning its distribution and logistics network. While intended for long-term efficiency, this may exert some pressure on margins in the near term. Despite improvements, SG&A expenses remain a focus area with a slight increase, and the company is working on further cost management.
Tariff Impact: Management anticipates only a minimal impact on Q2 margins from US tariffs and is considering selective price increases to offset potential future costs. Recent changes to the tariff structure pose a significant challenge, with impacts uncertain as the company assesses mitigation strategies.
Strategic Initiatives: On the positive side, Levi's omnichannel initiatives, including "Buy Online, Pick-up in Store" (BOPIS) and other digital enhancements, are expected to continue supporting performance. The company's brand strength also remains a positive factor.
Dockers Brand Sale: Levi Strauss recently entered into a definitive agreement to sell its Dockers brand to Authentic Brands Group for an initial $311 million, with potential for more. While this is a significant strategic move, the sale is expected to close around July 31, 2025, for U.S. and Canadian operations, meaning its impact will largely be felt after Q2 ends. The company's FY 2025 guidance was updated to reflect Dockers as a discontinued operation.
Overall Outlook
Analysts and the company itself have adopted a cautious outlook for the full fiscal year 2025. For the full year, revenue is projected to decline by 1%–2% (excluding tariff effects), while gross margin is expected to rise by roughly 100 basis points to 61.6%. Adjusted EPS for FY25 is guided at $1.20-$1.25.
Headwinds
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Soft discretionary spending: Denim and casual wear demand remains under pressure.
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FX and tariffs: Currency translation and China tariffs are modest but persistent drags.
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SG&A deleverage: Cost pressures from inflation and logistics transitions.
Tailwinds
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Omnichannel strength: Initiatives like BOPIS, mobile checkout, and same-day delivery are gaining traction.
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Project Fuel: Transition to hybrid logistics model could improve long-term margins.
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Brand resilience: Despite macro softness, Levi’s brand equity remains strong.
Historical Earnings Behavior
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Beat rate: 4 straight EPS beats; last quarter beat by +35.7%.
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Post-earnings stock move: Historically positive 1-day return ~53% of the time, with a median gain of +4.2%.
Levi Strauss & Co. (LEVI) Price Target
Based on 12 analysts from Tiger Brokers offering 12 month price targets for Levi Strauss & Co in the last 3 months. The average price target is $19.98 with a high forecast of $24.82 and a low forecast of $15.00. The average price target represents a 2.38% change from the last price of $19.55.
Technical Analysis - Exponential Moving Average (EMA)
The bulls are in control with rising strong positive momentum on the RSI, and the bulls have keep the key level of 50-day and 200-day period well, and we have seeing a crossover of the 50-day over 200-day.
This would mean that the bullish uptrend continuation would continue into the earnings tomorrow, unless the guidance given by Levi could derail this uptrend.
Summary
LEVI is entering earnings with low expectations, which could set the stage for a positive surprise if margins hold and omnichannel momentum continues. However, the cautious FY25 guidance (EPS: $1.20–$1.25) and weak discretionary backdrop temper enthusiasm.
Investors will be closely watching for:
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Whether LEVI meets or exceeds the analyst consensus for EPS and revenue.
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Management's commentary on consumer demand, particularly in the discretionary apparel segment.
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Further details on the progress and financial impact of "Project Fuel."
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Any updates on how the company plans to mitigate future tariff impacts.
Historically, LEVI's stock has shown a tendency to outperform following earnings announcements (positive one-day returns in about 53% of cases over the last five years). However, the general market sentiment given the broader tariff landscape could influence how investors react to the actual numbers.
Appreciate if you could share your thoughts in the comment section whether you think LEVI could navigate the tariff concerns with their mitigation strategies.
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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