Levi Strauss (LEVI) Speeds Up Strategic Plans, Expands Stores
Levi Strauss & Co. LEVI is focused on boosting growth across its business through its strategic efforts, including brand strength. Recently, management shared strategic plans like achieving commercial success in the East Asia Pacific (EAP) region. To this end, LEVI looks forward to introduce more stores apart from refreshing the existing ones refreshes and building new in-store services across the region. LEVI is on track with the diversification of its business across geographies, apparel categories and distribution channels.
This year, management will launch Levi Strauss stores in countries like Japan, Australia, Indonesia, Singapore, Malaysia and Thailand. Also, LEVI will refurbish its several retail stores and shop-in-shops into NextGen Indigo stores, providing a seamless store experience with digital tools to streamline the consumer journey. Certain stores in the region will have in-store tailoring services focusing more on personalization. LEVI will introduce stores at 100 plus locations.
Additionally, Levi Strauss is focused on omni-channel engagement, leveraging the hybrid customer experience model. LEVI looks to redouble its digital-transformation efforts. LEVI will leverage its digital arm, data and AI to boost efficiency and accelerate the product innovation process. LEVI will strengthen its foothold in the direct-to-consumer (DTC) realm to elevate the consumer experience. Overall, Levi Strauss is positioning itself for success in the future via technological upgrades, innovation and better services to the customers.
What Else?
On Apr 6, 2022, Levi Strauss reported outstanding first-quarter fiscal 2022 results. Both sales and earnings beat the Zacks Consensus Estimate and improved year over year. Impressive gains from its e-commerce business and strategic efforts, including brand strength drove the quarterly performance. Segment wise, net revenues in the Americas jumped 26.4% year over year to $765.9 million, while in Europe, the metric increased 12.6% to $469.4 million and the same in Asia, grew 10.9% to $258.4 million.
Direct-to-consumer (DTC) net revenues grew 35% on gains from the company-operated stores and e-commerce business. As a rate of quarterly revenues, sales from this currently Zacks Rank #3 (Hold) company’s DTC stores and e-commerce accounted for 30% and 9%, respectively, of the total 39%. Further, wholesale net revenues rose 15% on robust demand for the LEVI's brand, globally. Levi Strauss’ global digital revenues grew roughly 16% year over year, comprising nearly 25% of first-quarter 2022 revenues.
Given Levi Strauss’ strength in business and growth strategies, management remains optimistic about fiscal 2022. LEVI continues to witness robust demand for the products across geographies and categories. Management projects a net revenue increase of 11-13% from the fiscal 2021 level to the band of $6.4-$6.5 billion. Adjusted earnings per share (EPS) are expected between $1.50 and $1.56, indicating growth from $1.47 earned in fiscal 2021.
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Shares of this San Francisco, CA-based player have decreased 23.2% in the past six months, outperforming the industry’s 33.7% plunge.
Solid Picks in Retail
Some better-ranked stocks in the broader Retail sector are Capri Holdings CPRI, Boot Barn Holdings BOOT and Tapestry TPR.
Capri Holdings, which offers accessories and footwear, has a Zacks Rank #2 (Buy) at present. CPRI has an expected EPS growth rate of 53.9% for three-five years. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Capri Holdings’ current financial-year sales and EPS suggests growth of 37% and 215.8%, respectively, from the year-ago corresponding figures. CPRI has a trailing four-quarter earnings surprise of 1,018.2%, on average.
Boot Barn Holdings, a lifestyle retailer of western and work-related footwear, apparel and accessories, presently has a Zacks Rank of 2. BOOT has an expected EPS growth rate of 20% for three-five years.
The Zacks Consensus Estimate for Boot Barn Holdings’ current financial-year sales and EPS suggests growth of 62.6% and 220.8%, respectively, from the year-ago corresponding figures. BOOT has a trailing four-quarter earnings surprise of 47.1%, on average.
Tapestry, a renowned designer of fine accessories, presently carries a Zacks Rank of 2. TPR has a trailing four-quarter earnings surprise of 28.2%, on average.
The Zacks Consensus Estimate for Tapestry’s current-year sales and EPS suggests growth of 17.5% and 22.9%, respectively, from the corresponding year-ago levels. TPR has an expected EPS growth rate of 10% for three-five years.
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