Examining the Technicals of Levi Strauss & Co (NYSE: LEVI)

Levi Strauss & Co (NYSE: LEVI), one of the world’s most famous denim brands, is recovering from the COVID-19 crisis. As a result of opening new types of stores and expanding the range of goods, the company expects more substantial growth this year.

NextGen Levi Strauss stores have opened up in several cities worldwide, with sales focused on local customer data. In addition to the Tailor Shop apps and innovative fitting rooms, the concept also includes mobile advertising. Recent quarters saw the launch of 20 of these points of sale in the United States.

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Already, Levi Strauss notes that NextGen stores are generating a higher return on investment than the average’s store. Hence, the company will expand by opening more of these stores. Approximately 100 NextGen facilities are expected to open in the United States over the next two years. The Levi Strauss Company believes that these high-margin sales channels will eventually provide approximately 60% of its total revenue stream.

A key driver of growth is likely to be Levi Strauss &Co’s (NYSE: LEVI)’ expansion of its product range and changing consumer tastes. Therefore, women’s T-shirts, sweaters, sneakers, and other goods are gradually growing in popularity. Levi Strauss expects to generate half of its revenues in the next decade from non-denim clothing. T-shirts, sweaters, and sweatshirts make up a total of 21% of sales. But nearly one percent of this market is owned by the company today. The strong Levi’s brand offers plenty of opportunities for growth against this background.

Like other retailers, Levi Strauss also lost money in the first quarter of the pandemic, losing nearly 360 million in the second quarter. However, the company’s profits increased to $57 million for the fourth quarter.

Despite declining revenue, Levi Strauss & Co (NYSE: LEVI) margins remain strong. Gross margins reached 55.3 % for the fourth quarter. Levi Strauss’ margin expansion was attributed to a rise in prices and higher sales from direct channels.

Levi Strauss & Co (NYSE: LEVI) ‘s quarterly dividend turned out to be $0.04 per share, bringing its annual dividend to $0.16. At current share prices, the dividend yield is 0.8 %. If business performance improves, the company plans to consider a dividend increase.


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