Levi Strauss & Co IPO - Investment Case Presentation
Research
Publication Date: 14 Mar 2019 - By Robert Prather By Robert PratherIPO & Placements Equity Fundamental Equity Global Consumer
Levi Strauss & Co. is the iconic American apparel company that patented the first pair of blue jeans in 1873.
Strengths & Opportunities
- Turnaround measures taken under the leadership of new CEO seem to be paying off as revenues are growing once again and Levi’s is regaining market share
- Levi’s remains committed to expand DTC sales and diversify its product offerings away from men’s bottoms
- Levi’s continues to open its own retail stores and plans to increase in-store traffic by introducing customization and personalization features
- Strong secular tailwinds from rebound in global denim sales likely to benefit Levi’s due to its strong brand name and global presence
- Gross and EBIT margins, and cash flows improving
Risks & Concerns
- Levi’s operates in a very competitive industry with low barriers to entry and competitors including denim manufacturers as well as athleisure and fast fashion brands
- Increasing competition from the growth of private label brands including those offered by its wholesale partners
- Sales are decelerating in all its geographic regions
- Increasing SG&A due to step-up in selling and marketing expenses likely to pressure operating margins
- High brick-and-mortar exposure
Levi Strauss Co IPO - Investment Case Presentation
Source: VR Fundamental
Pages: 59
Released: 14 Mar 2019
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