Shares of denim maker Levi Strauss & Co. (LEVI) dropped over 7% in after-hours trading following the company’s disappointing 2025 outlook. However, Levi clarified that the weak forecast stems from currency fluctuations, one fewer fiscal week, and divested businesses, rather than sluggish demand.
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Levi Strauss Provides FY25 Guidance
Levi Strauss stated that it expects its reported net revenue to drop by 1% to 2% in FY25, falling short of the projected 3.7% growth, according to LSEG (London Stock Exchange Group). However, organic net revenues are expected to grow between 3.5% and 4.5%.
Additionally, it projects its adjusted EPS (earnings per share) to range from $1.20 to $1.25, below the expected $1.37.
Levi Strauss Reports Strong Holiday Quarter
On the positive side, the company reported strong numbers in Q4 and ended FY24 on a high note. In the fourth quarter, net revenues increased 8% to $1.84 billion, surpassing estimates of $1.73 billion. This was driven by higher sales of Levi’s trendy denim dress collection and wide-legged bottoms during the holiday quarter.
Moreover, the company’s underperforming U.S. wholesale business saw a return to revenue growth after six consecutive quarters of decline, driven by fresh collections, including men’s apparel.
For FY24, net revenues increased by 3% year-over-year to $6.35 billion.
Analyst Weighs in on Levi’s Outlook
Rachel Wolff, an analyst at EMarketer, stated that the outlook highlights the challenges many retailers face as they try to deal with President Trump’s tariff threats and a less predictable market. However, Levi’s relatively low exposure to China, Mexico, and Canada gives it a stronger position to handle these challenges compared to most other companies.
Is LEVI a Good Stock to Buy Now?
As per the consensus rating on TipRanks, LEVI stock has received a Moderate Buy rating, based on two Buy and five Hold recommendations. The Levi share price forecast is $21, which is 16% above the current trading level.
