Denim clothing company Levi's (NYSE: LEVI) will be reporting earnings this Wednesday after market hours. Here’s what investors should know.
Levi's beat analysts’ revenue expectations last quarter, reporting revenues of $1.56 billion, up 8% year on year. It was a satisfactory quarter for the company, with a beat of analysts’ EPS estimates but full-year EPS guidance slightly missing analysts’ expectations.
Is Levi's a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting Levi’s revenue to grow 4.6% year on year, slowing from the 7% increase it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Levi's has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at Levi’s peers in the consumer discretionary segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Carnival delivered year-on-year revenue growth of 3.5%, beating analysts’ expectations by 1.1%, and Nike reported a revenue decline of 4.3%, falling short of estimates by 1%. Carnival traded up 10.8% following the results while Nike was down 3.9%.
Read our full analysis of Carnival’s results here and Nike’s results here.
In the last twelve months or so, the market has shifted its attention from one area of macro importance to the next (AI disintermediation and AI capex spending to geopolitical conflict, rates, and whether the economy is on solid footing or not). While some of the consumer discretionary stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 4.8% on average over the last month. Levi's is down 2.7% during the same time and is heading into earnings with an average analyst price target of $27.53 (compared to the current share price of $20.29).
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