Back to top

Image: Bigstock

Levi Strauss (LEVI) to Post Q2 Earnings: Key Factors to Note

Read MoreHide Full Article

Levi Strauss & Co. (LEVI - Free Report) is likely to register an increase in the top line when it reports second-quarter fiscal 2022 earnings on Jul 7, after the market closes. The Zacks Consensus Estimate for revenues is pegged at $1.44 billion, indicating an improvement of 12.6% from the prior-year reported figure. However, the growth rate is likely to have decelerated from 22% registered in the first quarter.

The bottom line of this apparel company is expected to be flat year over year. The Zacks Consensus Estimate for second-quarter earnings per share has risen by a penny to 23 cents over the past seven days.

The company has a trailing four-quarter earnings surprise of 48.5%, on average. In the last reported quarter, this San Francisco, CA-based company’s bottom line surpassed the Zacks Consensus Estimate by 9.5%.

Key Factors to Note

Decent demand across a diversified portfolio, strategic price increases and the launch of innovative products are likely to have benefited Levi Strauss’ second-quarter top line. Evidently, the company’s ability to raise prices may have helped mitigate the impact of cost pressures to an extent, including inflation in inputs and logistics. We also note that gains from direct-to-consumer business and next-generation stores, as well as expanding digital presence, might have contributed to Levi Strauss’ performance in the to-be-reported quarter.

Clearly, the aforementioned factors instill optimism. However, the challenging economic backdrop, including the COVID-related supply chain bottlenecks and inflationary pressures, remain matters of concern. Again, any sharp spike in selling and distribution expenses along with higher labor costs may get reflected in margins. Industry experts also pointed out that price-conscious consumers might have traded down to cheaper brands amid a heightened inflationary environment, and this is likely to have impacted Levi Strauss’ sales to an extent.

Levi Strauss & Co. Price, Consensus and EPS Surprise

Levi Strauss & Co. Price, Consensus and EPS Surprise

Levi Strauss & Co. price-consensus-eps-surprise-chart | Levi Strauss & Co. Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Levi Strauss this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Levi Strauss has an Earnings ESP of +6.67% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

3 More Stocks With the Favorable Combination

Here are three more companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat:

Ulta Beauty (ULTA - Free Report) currently has an Earnings ESP of +2.46% and a Zacks Rank #1. The company is likely to register an increase in the bottom line when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $4.78 suggests an increase of 4.8% from the year-ago reported number.

Ulta Beauty’s top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.18 billion, which suggests an increase of 10.8% from the prior-year quarter. ULTA has a trailing four-quarter earnings surprise of 49.8%, on average.

Kroger (KR - Free Report) currently has an Earnings ESP of +1.17% and a Zacks Rank #1. The company is expected to register bottom-line growth when it reports second-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly earnings per share of 81 cents suggests growth of 1.3% from the year-ago quarter’s reported figure.

Kroger’s top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $33.99 billion, indicating an increase of 7.3% from the year-ago quarter. KR has a trailing four-quarter earnings surprise of 20.3%, on average.

Tapestry (TPR - Free Report) currently has an Earnings ESP of +3.62% and a Zacks Rank #3. The company is expected to register bottom-line growth when it reports fourth-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly earnings per share of 78 cents suggests growth of 5.4% from the year-ago quarter’s reported figure.

Tapestry’s top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $1.64 billion, indicating an increase of 1.8% from the year-ago quarter. TPR has a trailing four-quarter earnings surprise of 17.6%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


The Kroger Co. (KR) - free report >>

Ulta Beauty Inc. (ULTA) - free report >>

Tapestry, Inc. (TPR) - free report >>

Levi Strauss & Co. (LEVI) - free report >>

Published in