Latest news with #LeviStrauss
Yahoo
15 hours ago
- Business
- Yahoo
Up 20% This Year, Is Levi Strauss Worth a Look?
Key Points Levi Strauss had strong results for its second quarter. The trends for the company have been rather weak year to year relative to the S&P 500. Given uncertainty over tariffs, and the rapid increase in the share price last week, now might not be the time to get involved. 10 stocks we like better than Levi Strauss & Co. › While I do own its jeans, I don't own Levi Strauss (NYSE: LEVI) stock. The company saw some attention last week when it reported better-than-expected earnings results, in which it raised its guidance for the year. As a result, shares went on an 11% run, bringing total year-to-date gains to over 20% at the time of this writing. The question now becomes: After such a run in the stock price, is there still value here? The second quarter There's a lot to like in Levi's most recent quarter. Sales increased by 5% in the Americas and a strong 14% in Europe, with a 12% increase for Beyond Yoga. The one weak spot for the company was Asia, where sales declined by 1%. Overall, this led to operating margins of 7.5% in the second quarter, compared to margins of 1.5% in the year prior. Net revenues rose 6% for a reported basis, and there was an organic basis increase of 9% versus a year ago. I like the company's balance sheet, which saw stockholders' equity increase to $2.09 billion versus $1.97 billion a year ago. Earnings were substantially better than the year prior. Total net income of $67 million was much better than last year's income of $18 million, and earnings per share are significantly improved. Levi Strauss reported Q2 diluted net income of $0.17 per share, versus earnings of $0.04 per share in 2024. Updated guidance The good news extended to the company's full-year outlook, though I find it slightly less exciting than some do. Net revenue growth is expected to be 1% to 2%, compared to a previous forecast of a decline of 1% to 2%. Organic revenue growth is expected to be up a comparable 1%, to 4.5% to 5.5%. It wasn't all good news, however. Gross margins are expected to expand by 80 basis points, versus a previous estimate of "up to" 100 basis points. The main reasoning for this decline is based on the effect of tariffs. Adjusted diluted earnings per share are expected to increase by $0.05 to $1.25, compared to previous guidance of $1.20. Granted, we're going on an adjusted basis here, but it would give the stock a forward price-to-earnings (P/E) ratio of roughly 16 times full-year earnings. This is a positive, as according to Levi's historical average over the last seven years is 38.11. With that valuation, the stock seems pretty fairly priced for what is happening now. The question is: How badly will tariffs mess things up? This is a very difficult question to answer. For one, we don't always know exactly what President Donald Trump's tariffs will be. They can shift and change as negotiations continue. According to CNBC, what is known is that Levi's sources goods from Pakistan and Bangladesh, both of which Trump has threatened with tariffs of 30% or higher. Levi's noted that it plans to "absorb" as much of the tariffs as it can. It's expecting that tariffs will be a problem of about $25 million to $30 million in 2025, which amounts to $0.02 to $0.03 per share. I always say to err on the side of caution. Who can say for sure how much tariffs will truly end up affecting Levi's sales figures? The last few years haven't been overly inspiring, with the company's overall revenue growth trending downward since its bounce-back in 2021 post-COVID-19. I think this is a stock that should be rated as a "hold" or "sell" if you've already been involved, as there are gains to be taken. This does not seem like a time to add a new position. The stock took off last week, and baked in a lot of what could be expected this year. I credit the company on its stronger results, but historically this is a stock that has big ups, followed by heavy downward drops as demonstrated in this five-year chart. For new buyers, I say keep an eye on this one for any pullbacks that present better opportunities, but don't chase these first-quarter results. The rest of the year might not be that exciting. Should you buy stock in Levi Strauss & Co. right now? Before you buy stock in Levi Strauss & Co., consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Levi Strauss & Co. wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 David Butler has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Up 20% This Year, Is Levi Strauss Worth a Look? was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
Trump's Trade War Could Kill Lesotho's Garment Industry
The tiny southern African nation of Lesotho is watching the days pass with a growing sense of despair—and desperation. As the White House's 'Liberation Day' tariff deadline of Aug. 1 creeps closer with no sign of a deal for the country President Donald Trump once said 'nobody has ever heard of,' nor the renewal of a critical trade program that has boosted economic development on the Sub-Saharan continent for a quarter of a century, the outlook for Lesotho is nothing short of bleak. More from Sourcing Journal Canada, Losing Confidence in US Trade Deal, Cozies Up to Mexico Trump Touts Trade Truce With Indonesia, Indicates India Might Not Be Far Behind Is Amazon's Third-Party Marketplace Stoking Worker Exploitation? A follow-through of the so-called 'reciprocal' rate of 50 percent—the highest faced by any country outside of China—could also be the undoing of its garment industry, which contributed more than half of Lesotho's nearly $1 billion in annual exports in 2024 and underpins roughly 20 percent of its gross domestic product. Some 75 percent of the clothing it makes for brands such as JCPenney, Levi Strauss & Co., Reebok, The Children's Place and Wrangler owner Kontoor Brands are earmarked for the United States. Denim and activewear are big categories. Some Trump-branded Greg Norman golf shirts are made in Lesotho, too. The rumblings of a potential exodus by American buyers are already being keenly felt. Orders started evaporating in April, when the initial tariffs were announced, and a significant fraction of Lesotho's 30,000 mostly female garment workers were furloughed or laid off beginning in June. With unemployment standing at 30 percent—or nearly 50 percent for young people—Nthomeng Majara, the country's deputy prime minister, said a 'state of disaster' would be in force until June 2027, allowing it to 'take all necessary steps' to unlock funds to spur job creation in other sectors. If the African Growth and Opportunity Act, or AGOA, isn't renewed in September, the entire garment industry could cease to exist, the government has said. It doesn't help that U.S. foreign aid cuts have 'crippled industries that previously sustained thousands of jobs,' as Prime Minister Samuel Matekane said on TV last month. Nor does it that until March, Lesotho was under an eight-month state of disaster because of acute food insecurity. 'There's a lot of uncertainty,' said Scott Nova, executive director of the Worker Rights Consortium, a labor rights watchdog in Washington, D.C. 'Lesotho and other garment exporters are facing the prospect of tariff rates that were unthinkable six months ago and in many cases look unsurvivable.' What made Lesotho attractive for brands was its low production costs, coupled with tariff-free trade under AGOA. The concern, he added, is that the Trump administration has been unwilling to pay attention to the matter, at least to the 'degree that action will happen,' despite AGOA previously enjoying bipartisan support in Congress. While economists have questioned its formula, the White House claims that Lesotho imposes 99 percent in tariffs and other trade barriers on the United States, creating a $234.5 million trade deficit in 2025. As far as Nova is concerned, that's a rounding error. 'Is there anything Lesotho could particularly do to fix the trade deficit?' he asked. 'They're selling two things: diamonds and clothing, and they're not going to buy an equivalent amount of diamonds from the U.S, right? That's not an option. And blue jeans—basic blue jeans, even higher-end blue jeans—are not coming back to the U.S. for production. And since they're not, there really isn't any beneficiary of high tariffs. Nobody wins.' Of the brands that were contacted about changes in their sourcing strategy, only Levi's responded to say that its plans have remained 'unchanged.' The denim giant is a prominent client of Nien Hsing Textile Group, a major employer that shuttered several of its subsidiaries, including Glory International, Nien Hsing International and C&Y Garments, in 2023 due to what it said was a lack of demand for its products on the international market, especially in the United States. Two years before that, the Covid-19 fallout and 'other market forces' led to mass retrenchments. A spokesman from Nien Hsing Textile Group said that Nien Hsing Lesotho has orders until the first quarter of 2026, though he would not say if there have been or will be further layoffs. Other factories are less lucky. Facilities employing thousands of people, such as Precious Garments, Tzicc Clothing Manufactures and Maseru-E Textiles, haven't fielded orders since the tariff was originally announced, said Solong Senohe, secretary-general at the United Textile Employees Union, or UNITE, which has been negotiating worker settlements with various owners. Precious Garments, he said, has started rotating employees on shifts that have them working just two weeks out of each month. Many of UNITE's members, however, have been placed on 'short-term layoff' without pay until September, with a rapidly dwindling hope that they might be recalled in October if the tariff rate eases or if, by some miracle, AGOA is put back in play, returning it to equal footing with competitors like Ethiopia, Ghana and Kenya that are facing an additional 10 percent tax post-Aug. 1—no different than what every nation is grappling with now. Even South Africa's 30 percent figure looks like a bargain by comparison. Most of the workers whose livelihoods are now hanging by a thread don't know what they will do if they remain unemployed, Senohe said. They worry that when schools reopen later this month, they're not going to be able to afford the fees. Or worse, that they will lose the literal roof over their head because they can no longer afford rent. They will also have to contend with extreme deprivation in a country where half of its 2 million-strong population already lives below the poverty line. Even breaking into the far less-regulated informal sector would be difficult because 'it is already flooded,' he said. The garment industry's travails will extend into other sectors that rely on workers' patronage: transportation operators, say, or lunchtime vendors. When their savings run out, workers could find themselves resorting to the most dangerous jobs. Parents could be forced to traffic their children. 'The government's response is to opt to diversify export markets to the European Union or other African countries like South Africa,' Senohe said. 'But unfortunately, the process is not that easy; negotiations have to start now. And meanwhile, people are suffering.' Nova thinks that September will be a decision inflection point. No AGOA and a 50 percent duty on garments from Lesotho would also mean no garment industry in Lesotho, he said. Many of the support programs workers relied on, such as HIV and tuberculosis prevention, have already been pulled because of the gutting of the U.S. Agency for International Development. If conditions further deteriorate, 'every social ill that already exists in Lesotho will be massively magnified for this worker population,' he said, before adding, 'it'll be one of the worst things we've ever seen in the garment industry. There will be no place for people to go.' It was only in 2021 that Lesotho was the site of the first binding agreement to tackle gender-based violence and harassment in the fashion industry. The Worker Rights Consortium, the Solidarity Center, the Federation of Women Lawyers in Lesotho and UNITE were among a slew of organizations that helped broker a hard-won deal between Nien Hsing Textile Group, Levi's, The Children's Place and Kontoor Brands to create a worker-led program to eliminate sexual harassment and abuse across the then-four shop floors. The Lesotho Agreement to End Gender-Based Violence and Harassment would prove to be one of the templates for the Dindigul Agreement to Eliminate Gender-Based Violence and Harassment in India and the Central Java Agreement for Gender Justice in Indonesia. The fate of the program is now in the air because it's tied to that of the industry. Senohe said that factory owners were told by brands that their companies had 'no say in this' because the state of affairs was directed by the U.S. government and they cannot increase the prices of the products they buy. But these are people's lives that are at stake, he said. Surely brands should feel some kind of responsibility? He's unsure why this isn't the case. 'The buyers are not willing to pay the tariffs,' Senohe said. 'Even the 10 percent tariffs now they are not paying. The factories are doing it. The reason they are exporting from Lesotho is the cheap labor that gives them more profit. It is, unfortunately, how capitalism works. It sucks your blood and whatever to make profit and then, at the end of the day, it dumps you.' And come September, if nothing changes, mass firings will begin in earnest. Factories that depend on U.S. orders, too, will have no choice but to close. The implications of this are deep and sweeping. Even if part of the sector survives, it'll no longer be beholden to American brands' generally higher-road requirements, such as freedom of association, freedom from forced labor and freedom from gender-based violence and harassment. Instead, Lesotho may have to court markets—perhaps China—'where people don't care.' 'I think the worst scenario is going to be that people are going to cross the border into South Africa as illegal migrants,' Senohe said. 'There is a textile hub in the city of Newcastle in KwaZulu-Natal, where most of the people are illegal and you're harassed every day by the police. Some of them are going to go to the illegal mines in South Africa. If somebody comes up and says, 'I have work for you in South Africa,' they will go there. And then we don't know if we'll ever see them again.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Levi's to Close Northern Kentucky Distribution Center
Levi Strauss & Co. (LS&Co.) is set to close its distribution center in Hebron, Ken., next month. Spectrum News reported that a company letter filed under the Worker Adjustment and Restraining Notification Act was sent to the Kentucky Department of Workforce Development on June 16. The closure will affect approximately 346 employees at the company-owned distribution center. LS&Co. said some will be able to apply for a job at another company location. More from Sourcing Journal Is 'Quiet Western' the New Quiet Luxury? Best Denim Style at Paris Men's Fashion Week Levi's and Holt Renfrew Plan Popups and Activations Spectrum added that Levi's did not give a reason for the closure. However, the company announced earlier this year that it would undergo a restructuring plan to consolidate operations and cut costs as it pivots to being a DTC-first brand. This included a reduction of its corporate workforce by 10-15 percent. As part of the strategy called Project Fuel, the company said it would change its distribution strategy from an owned and operated model to a mix of owned and third-party operated distribution centers used to warehouse and ship products to wholesale customers, retail stores and e-commerce customers. In certain locations around the globe, LS&Co. said it had already consolidated distribution centers to service multiple countries. Levi's is shrinking its footprint in other ways. It ended Levi's low-margin product line Denizen and exited the footwear category. It also offloaded Dockers to Authentic Brands Group in May for $311 million. LS&Co. raised its outlook for 2025 last week following positive Q2 results. Revenues rose 6 percent to $1.4 billion, a 9 percent increase on an organic basis. Sign in to access your portfolio
Fashion Network
4 days ago
- Business
- Fashion Network
How Levi's is blending music, tech and fashion to drive growth
Levi Strauss is riding a fresh wave of momentum, posting a 9% increase in like-for-like sales for the first half of its 2025 financial year. Building on that growth, the denim giant now expects full-year sales to rise by 1% to 2%. But according to CEO Michelle Gass, the results reflect more than a temporary boost—they validate the vision and restructuring she has led since taking the helm in 2023. Under her leadership, Levi's has made bold moves, including divesting its Denizen brand in Asia, exiting its footwear division, and selling Dockers, the iconic chinos label. The company's ' Project Fuel' transformation plan, launched in early 2024, also included a major reorganization of its regional headquarters. These decisions align with Gass's broader ambition to turn Levi's into a global lifestyle brand rooted in denim, with a direct-to-consumer focus. 'The brand has never been stronger, and that's thanks to a combination of things,' Gass told analysts during a recent earnings call. 'We have a rich heritage, but you have to earn that relevance every day. That means showing up wherever the consumer is—on social media, in music, at cultural events, through Beyoncé or Shaboozey's wardrobe.' The Beyoncé partnership, linked to her 'Cowboy Carter' album and tour, is a powerful example of how Levi's continues to blend culture and commerce. 'This quarter, we launched the third chapter of our 'Reiimagine' campaign with Beyoncé, recreating a classic Levi's ad from the archives,' Gass said. 'We rolled out a limited-edition product line and worked directly with her team through our House of Strauss platform to design exclusive, custom looks for her tour. Staying deeply connected to music culture remains a pillar of our marketing strategy.' Levi's music push doesn't end there. In Europe, the brand recently partnered with Barcelona's Primavera Sound festival, launching a capsule collection and branding three performance stages. It also released a special-edition collection in tribute to the legendary British band Oasis. Still, Gass is quick to point out that Levi's rebound isn't built on celebrity campaigns alone—particularly in Europe, where sales rose 15% year over year on a like-for-like basis. 'Last month, I visited key cities like Paris, Barcelona and Milan. I was genuinely impressed by the brand's strength in these markets—both in-store and with younger consumers. Our teams have made real improvements in how and where Levi's shows up,' she said. The group's operating margin hit 17.2% in Q2, a 210 basis-point improvement. France, the UK, Italy and Spain all posted double-digit sales growth. Gass said she met with key franchise partners as well as retail heavyweights like Zalando and Galeries Lafayette —and sees continued potential for growth across Europe. Another bright spot is Levi's 'tops' category, which includes T-shirts, dresses and jumpsuits. 'Last year, we restructured our tops division—and it's paying off. This category is driving our evolution from jeans-only to full lifestyle,' Gass noted. The brand also introduced a new fast-track design function to bring tops and graphic tees to market faster and respond to trends through its direct channels. The brand is leaning into the westernwear revival, citing strong sales for subtle western-inspired silhouettes. Long, baggy shorts—a nod to the Y2K aesthetic—have also performed well. Levi's is branching out from its denim roots with fabric innovations like the 'Linen plus Denim' blend, designed for warmer climates and now used across a wider range of product categories. These innovations support Levi's shift toward a more premium segment. The brand recently partnered with high-end label Sacai and launched its elevated Blue Tab line—moves that allow it to justify selective price increases. Still, Levi's remains a mass-market brand at its core. Gass is focused on leveraging technology and data to refine product offerings and enhance profitability. 'We've streamlined our assortment and introduced newness with discipline,' she said. 'That's helping us drive better productivity and more full-price sales. These choices are key to maintaining our market leadership and growing the average spend per customer.' That discipline appears to be paying off. With strong investor confidence, Levi's and its ambitious CEO are now one step closer to hitting their goals of 5% annual organic growth and 15% operating margins.
Fashion Network
4 days ago
- Business
- Fashion Network
How Levi's is blending music, tech and fashion to drive growth
Levi Strauss is riding a fresh wave of momentum, posting a 9% increase in like-for-like sales for the first half of its 2025 financial year. Building on that growth, the denim giant now expects full-year sales to rise by 1% to 2%. But according to CEO Michelle Gass, the results reflect more than a temporary boost—they validate the vision and restructuring she has led since taking the helm in 2023. Under her leadership, Levi's has made bold moves, including divesting its Denizen brand in Asia, exiting its footwear division, and selling Dockers, the iconic chinos label. The company's ' Project Fuel' transformation plan, launched in early 2024, also included a major reorganization of its regional headquarters. These decisions align with Gass's broader ambition to turn Levi's into a global lifestyle brand rooted in denim, with a direct-to-consumer focus. 'The brand has never been stronger, and that's thanks to a combination of things,' Gass told analysts during a recent earnings call. 'We have a rich heritage, but you have to earn that relevance every day. That means showing up wherever the consumer is—on social media, in music, at cultural events, through Beyoncé or Shaboozey's wardrobe.' The Beyoncé partnership, linked to her 'Cowboy Carter' album and tour, is a powerful example of how Levi's continues to blend culture and commerce. 'This quarter, we launched the third chapter of our 'Reiimagine' campaign with Beyoncé, recreating a classic Levi's ad from the archives,' Gass said. 'We rolled out a limited-edition product line and worked directly with her team through our House of Strauss platform to design exclusive, custom looks for her tour. Staying deeply connected to music culture remains a pillar of our marketing strategy.' Levi's music push doesn't end there. In Europe, the brand recently partnered with Barcelona's Primavera Sound festival, launching a capsule collection and branding three performance stages. It also released a special-edition collection in tribute to the legendary British band Oasis. Still, Gass is quick to point out that Levi's rebound isn't built on celebrity campaigns alone—particularly in Europe, where sales rose 15% year over year on a like-for-like basis. 'Last month, I visited key cities like Paris, Barcelona and Milan. I was genuinely impressed by the brand's strength in these markets—both in-store and with younger consumers. Our teams have made real improvements in how and where Levi's shows up,' she said. The group's operating margin hit 17.2% in Q2, a 210 basis-point improvement. France, the UK, Italy and Spain all posted double-digit sales growth. Gass said she met with key franchise partners as well as retail heavyweights like Zalando and Galeries Lafayette —and sees continued potential for growth across Europe. Another bright spot is Levi's 'tops' category, which includes T-shirts, dresses and jumpsuits. 'Last year, we restructured our tops division—and it's paying off. This category is driving our evolution from jeans-only to full lifestyle,' Gass noted. The brand also introduced a new fast-track design function to bring tops and graphic tees to market faster and respond to trends through its direct channels. The brand is leaning into the westernwear revival, citing strong sales for subtle western-inspired silhouettes. Long, baggy shorts—a nod to the Y2K aesthetic—have also performed well. Levi's is branching out from its denim roots with fabric innovations like the 'Linen plus Denim' blend, designed for warmer climates and now used across a wider range of product categories. These innovations support Levi's shift toward a more premium segment. The brand recently partnered with high-end label Sacai and launched its elevated Blue Tab line—moves that allow it to justify selective price increases. Still, Levi's remains a mass-market brand at its core. Gass is focused on leveraging technology and data to refine product offerings and enhance profitability. 'We've streamlined our assortment and introduced newness with discipline,' she said. 'That's helping us drive better productivity and more full-price sales. These choices are key to maintaining our market leadership and growing the average spend per customer.' That discipline appears to be paying off. With strong investor confidence, Levi's and its ambitious CEO are now one step closer to hitting their goals of 5% annual organic growth and 15% operating margins.
