Levi Strauss (LEVI) posted a powerful year, with net profit jumping 226.1% from last year and achieving a net profit margin of 7.9%, up significantly from 2.7%. The pace of projected earnings growth, at 10.55% per year, lags the broader US market but still signals a steady expansion outlook for both revenue and profits. With shares priced at a discount to industry peers based on price-to-earnings ratios, investors are now weighing high quality historical earnings and future margin potential against key risks such as dividend sustainability.
See our full analysis for Levi Strauss.
Now let’s see how these headline numbers compare with the major narratives shaping investor expectations this season.
See what the community is saying about Levi Strauss
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Direct-to-Consumer sales now represent over half of total revenue, driving a 400 basis point increase in EBIT margin year-to-date and contributing to a net profit margin of 7.9%.
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According to the analysts’ consensus view, the business is reaping the rewards of shifting toward branded stores and e-commerce, with rising international sales (Europe up 15%, Latin America up 18%) reinforcing margin gains.
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Strategic investments in omnichannel and premium segmentation are supporting higher average selling prices and elevating overall brand profitability, even as growth in Asia remains flat.
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The analysts’ consensus stresses that margin improvements and diversification into lifestyle categories help offset risks posed by denim dependence and volatile apparel trends.
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Strong expansion in Direct-to-Consumer and international markets is reshaping how Levi Strauss competes, and analysts’ consensus highlights how the latest margin progress supports a more resilient growth trajectory. 📊 Read the full Levi Strauss Consensus Narrative.
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Exposure to new tariffs, including an assumed 30% rate on Chinese goods and 10% for other imports, remains a key risk for the company’s cost base and is amplified by Levi Strauss’s heavy reliance on its core denim brand for most revenues.
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The consensus narrative underscores that while aggressive supply chain management can help, ongoing exits from brands like Dockers and Denizen further increase dependence on Levi’s, raising sensitivity to cyclical fashion trends.
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Any major consumer shift away from denim or toward fast fashion could quickly pressure both sales and margins due to this concentration.
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Analysts argue that strategic mitigation efforts, such as premium positioning and category expansion, are critical to offset tariff-driven cost headwinds.
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Shares trade at $21.46, an 18% discount to DCF fair value of $26.20 and below peer price-to-earnings multiples, but the consensus analyst price target sits at $26.46, only 23% higher than current pricing.
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Analysts’ consensus view is that the slim gap to target price reflects a belief that shares are close to fairly valued today, given expectations for only modest ($769 million) profit growth and a future PE ratio of 15.7x in 2028.
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Consensus expects the number of shares outstanding to decline by just 0.27% per year, supporting gentle EPS growth but limiting major valuation re-rating potential.
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Strong historical earnings quality and relative value appeal may draw long-term interest, but near-term pricing appears to already incorporate much of the optimistic growth outlook.
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To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Levi Strauss on Simply Wall St. Add the company to your watchlist or portfolio so you’ll be alerted when the story evolves.
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A great starting point for your Levi Strauss research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.
Despite margin progress, Levi Strauss faces ongoing risks from heavy brand concentration and tariff exposure. These factors limit near-term valuation upside and earnings predictability.
If you want steadier prospects, use our stable growth stocks screener to discover companies consistently delivering reliable revenue and profit expansion across changing market cycles.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include LEVI.
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