While I do own its jeans, I don't own Levi Strauss (LEVI -0. 71%) 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 (which is quite significant).
On the other hand, At the same time, As a result, s went on an 11% run, bringing total year-to-date gains to over 20% at the time of this writing.
Additionally, The question now becomes: After such a run in the stock price, is there still value here.
At the same time, The second quarter There's a lot to in Levi's most recent quarter, given the current landscape.
Furthermore, Sales increased by 5% in the Americas and a strong 14% in Europe, with a 12% increase for Beyond Yoga (an important development).
The one weak spot for the company was Asia, where sales declined by 1%. On the other hand, Overall, this led to operating margins of 7, given the current landscape.
5% in the second quarter, compared to margins of 1. On the other hand, 5% in the year prior (something worth watching). Furthermore, Image source: Getty Images, considering recent developments.
Additionally, Net revenues rose 6% for a reported basis, and there was an organic basis increase of 9% versus a year ago. I the company's balance sheet, which saw stockholders' equity increase to $2.
09 billion versus $1. 97 billion a year ago (this bears monitoring). Additionally, 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 are significantly imved, in today's market environment.
Levi Strauss reported Q2 diluted net income of $0, in today's market environment. 17 per, versus earnings of $0. 04 per in 2024.
At the same time, D guidance The good news ext to the company's full-year outlook, though I find it slightly less exciting than some do, amid market uncertainty.
Net revenue growth is expected to be 1% to 2%, compared to a previous forecast of a decline of 1% to 2%.
Furthermore, Organic revenue growth is expected to be up a comparable 1%, to 4, given the current landscape.
This leads to the conclusion that wasn't all good news, however, in today's market environment.
Gross margins are expected to expand by 80 basis points, versus a previous estimate of "up to" 100 basis points (remarkable data).
This analysis suggests that main reasoning for this decline is based on the effect of tariffs. Adjusted diluted earnings per are expected to increase by $0.
Conversely, 25, compared to previous guidance of $1, amid market uncertainty.
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 tells us that is a positive, as according to fullratio. Conversely, Com, Levi's historical average over the last seven years is 38, considering recent developments.
With that valuation, the stock seems pretty fairly priced for what is happening now, in today's financial world. Furthermore, The question is: How badly will tariffs mess things up.
The evidence shows is a very difficult question to answer, in today's financial world. 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.
Additionally, On the other hand, Levi's noted that it plans to "absorb" as much of the tariffs as it can.
The data indicates that 's expecting that tariffs will be a blem of $25 million to $30 million in 2025, which amounts to $0. 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.
Additionally, The last few years haven't been overly inspiring, with the company's overall revenue growth downward since its bounce-back in 2021 post-COVID-19, in today's financial world.
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.
Furthermore, This does not seem a time to add a new position, in this volatile climate. On the other hand, 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, ed by heavy downward drops as demonstrated in this five-year chart.
Moreover, 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.
What the re reveals is rest of the year might not be that exciting, in light of current trends. David Butler has no position in any of the stocks mentioned.
Additionally, The Motley Fool has no position in any of the stocks mentioned. The evidence shows Motley Fool has a disclosure policy (this bears monitoring), in today's market environment.