Levi Strauss (NYSE:LEVI) recently reported earnings for its third quarter of Fiscal Year 2022. Adjusted earnings per share came in at $0.40, which beat analysts’ consensus estimate of $0.37 per LEVI share. In the past nine quarters, the company has beaten estimates nine times.
Sales increased 1.3% year-over-year, with revenue hitting $1.52 billion compared to $1.5 billion, but lower than the $1.598 billion that analysts were looking for.
In addition, the company demonstrated operating deleverage since its operating income decreased despite an increase in revenue. Indeed, the operating margin contracted from 14.4% to 13.1%. As a result, the company’s operating income fell from $216 million in the comparable period to $199 million now.
Investor Sentiment for LEVI Stock is Currently Neutral
The sentiment among TipRanks investors is currently Neutral. Out of the 570,022 portfolios tracked by TipRanks, 0.3% hold LEVI stock. In addition, the average portfolio weighting allocated towards LEVI among those who do have a position is 3.64%. This suggests that investors of the company are fairly confident about its future.
However, in the last 30 days, 0.6% of those holding the stock decreased their positions. Nevertheless, the stock’s sentiment is above the sector average, as demonstrated in the following image:
Is LEVI Stock a Good Buy?
LEVI has a Strong Buy consensus rating based on seven Buys, one Hold, and zero Sells assigned in the past three months. The average LEVI stock price target of $24.38 implies 53% upside potential.
Takeaway – Levi Strauss Had a Mixed Quarter
Levi Strauss saw a mixed quarter. Adjusted EPS beat expectations but revenue did not. In addition, higher costs negatively impacted the company’s operating margin. Going forward, Levi Strauss expects adjusted EPS in the range of $1.44 to $1.49 for Fiscal Year 2022, lower than the consensus estimate of $1.54.
Nevertheless, investors shouldn’t be too harsh on the company because a lot of the unfavorable results were caused by foreign exchange headwinds, which is beyond any company’s control. Despite the numerous headwinds, Levi Strauss was able to grow its revenue and maintain its profitability.