Levi Straus Stock Ready to Buy the Dip

reputed clothing brand Levi Strauss & Company (NYSE:LEVY) The stock could end its decline after its latest earnings stabilization near the $17.50 range. The popular and sticky denim brand fought against a range of conflicts adversitybut reopen health benefit continues despite Omicron and inflation Pressure supply chain constraints had materially impacted net revenue by approximately $60 million. The company continued to increase its direct-to-consumer sales by 35% in its company-owned physical stores and e-commerce, Direct to consumer sales grew to 39% of total Q1 2022 sales. the pandemic has intensified digital transformation As a company it uses proprietary data analytics to make data-driven decisions artificial intelligence (AI) and systematic analysis of price elasticity. This has enabled the company to grow the global brick-and-mortar business by 50% compared to a year ago. The Levi app has doubled its monthly active users in the US and Europe in the quarter and plans to launch in India in the second quarter of 2022.

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Q1 Fiscal 2022 Earnings Results

On April 6, 2022, Levi Strauss reported its fiscal Q1 2022 earnings results for the quarter ended February 2022. The company reported earnings-per-share (EPS) of $0.46, beating consensus analyst estimates for $0.42, beating by $0.04. Revenue rose 21.9% year-over-year (YoY) to $1.59 billion, beating analyst estimates of $1.55 billion. Adjusted EBIT margin was 14.9% versus 13.3% the year-ago period. Global direct-to-consumer (DTC) revenue grew 35% annually, with 48% growth in company-owned stores and 10% growth in e-commerce. Levi Strauss CEO Chip Berg commented, “We started the year with strong consumer demand and solid momentum across geographies, channels and categories. The disciplined execution of our strategic priorities enabled us to deliver strong top- and bottom-line growth as we capitalize on structural tailwinds and successfully manage a dynamic operating environment. The strength and strategy of our brands is what drives us to deliver sustainable growth in the future. ,

reaffirmation guidance

The company confirmed its consensus analyst estimates of $150 to $.56 versus $1.53 for fiscal year 2022 EPS of $6.4 to $6.5 billion versus $6.44 billion. Levi Strauss CFO Harmeet Singh commented, “We achieved excellent financial results in the first quarter, driving strong double-digit revenue growth and record gross margins, enabling us to deliver an adjusted EBIT margin of 14.9 percent across our portfolio of brands. Ongoing consumer demand and our proven ability to deliver profitable growth gives us the confidence to reaffirm our full-year outlook despite incremental constraints from ongoing macro challenges.”

Conference Call Takeaways

CEO Berg began by considering the Russian invasion of Ukraine and efforts to help humanitarian causes by donating thousands of clothes to refugee families. He noted the broad strength across all markets, categories, genders and channels driving consumer demand. The company hit a high watermark of 14.9% EBIT, which grew faster than revenue. US denim sales have risen 11% since pre-pandemic levels two years ago. The company launched the premium-priced Circular 501 Jeans that are made from organic cotton and are recyclable. The looser fit is a popular tailwind driver of denim trend growth. The brand is resilient as consumer demand remains strong even after unit sales return to 2019 levels. The company continues to roll out next-generation stores. This is Dallas, Texas, the Northpark Mall next-gen store was the most productive US store in its second month of operation. The Levi brand grew 20% in its top five markets. DTC grew 35%, driven by improvements in brick-and-mortar. CEO Berg concluded with comments on its Beyond Yoga brand, “The brand started the year strong, exceeding our expectations in Q1. It is a well positioned premium brand but expands our total addressable market while contributing to the company’s diversification. ,

Levy Opportunistic Pullback Levels

using the rifle chart Provides an accurate view of the scenario for the LEVI stock on the weekly time frame as well as the daily time frame. Weekly Rifle chart bottomed out near $17.35 Fibonacci (Fib) Levels, The weekly lower Bollinger Band (BB) sits at $16.42 Fib. Weekly Rifle charts The downtrend halted as the 5-period moving average (MA) is starting to slope down against the 15-period MA falling below resistance at $21.10. The weekly 50-period MA is declining near the $25.06 level. Trying a mini puppy through the weekly stochastic 30-band. The Daily Rifle chart is downtrend with a 5-period MA at $18.92 with a slower 15-period MA at $19.69 and a 50-period MA at $20.67. Daily low BB sits at $17.92. the Daily Market Structure Less (MSL) Buy trigger on a breakout above the $19.13 level. The daily stochastic is halted just below the 30-band either ready for a mini reversal puppy on the 5-period MA breakout or a cross up on the 15-period MA breakout. Prudent investors can watch for opportunistic pullback levels at $18.41 fib, $17.73 fib, $17.35 fib, $16.82 fib, $16.45 fib, $15.52 fib, $14.85 fib and $13.75 fib. There is an upward trajectory from the $21.86 Fib level to the $28.40 Fib level.

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