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Levi Strauss & Co IPO - Investment Case Presentation

Research

Publication Date: 14 Mar 2019 - By Robert Prather By Robert Prather
Actionable
Differentiated

Equity Fundamental IPO & Placements 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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The Author

Robert Prather

Equity Analyst

Technology, Consumer, Industrials, Telecom & Media

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