Levi Strauss & Co (LV2B) AI Stock Analysis

Company Guidance

The company expects reported net revenues growth of approximately 7% for the full year versus its previous outlook of 7% to 7.5%, organic net revenues to be a little stronger at approximately 6%, gross margin of approximately 63% including approximately 80 basis points of net tariff refund benefit, adjusted SG&A as a percentage of revenue of approximately 51% including approximately 50 basis points of redeployment, adjusted EBIT margin slightly above the previous guidance at approximately 12.1% including approximately 30 basis points of net tariff refund benefit, and adjusted diluted earnings per share in the range of $1.54 to $1.56 including a $0.04 net tariff refund benefit; for the fourth quarter, reported net revenues are expected to be approximately 3%, organic net revenues approximately 4%, gross margin approximately 61.8%, adjusted SG&A includes approximately $30 million of tariff refund redeployment costs, adjusted EBIT margin approximately 11.4% to 11.6% including 180 basis points of net tariff refund redeployment costs, and adjusted diluted EPS approximately $0.36 to $0.38 including $0.07 of net tariff refund redeployment; DTC is expected to return to at least mid-single-digit growth in the fourth quarter and deliver high single-digit growth for the full year, while the DTC channel is expected to grow at a high single-digit rate for the full year, including mid-single-digit growth in the fourth quarter, and the company remains on track to deliver its annual algorithm of mid-single-digit revenue growth with a clear path to 15% operating margins over time.