Levi's (LEVI) Beats Revenue Estimates, Misses EPS Forecast

Q4 CY2024 Highlights:

* Revenue: $1.84 billion, exceeding estimates by 6.6%
* Non-GAAP EPS: $0.50, surpassing expectations by 3.7%
* Adjusted EBITDA: $301.2 million, outperforming estimates by 5.6%

Company Overview:

Levi's (NYSE: LEVI), founded in 1873, is an iconic denim apparel company known for its American heritage.

Apparel and Accessories Industry Dynamics:

* Changing consumer preferences and omnichannel retail experiences have impacted the apparel industry.
* Companies must adapt to shifting trends and customer buying habits to remain competitive.

Sales Performance:

* Levi's sales growth rate over the past five years has been below expectations at 2%.
* Annualized revenue growth over the last two years has been 1.5%, indicating weak demand.

Revenue Growth Analysis:

* Constant currency revenue has averaged 1.4% year-over-year growth over the last two years, reflecting stable demand despite foreign exchange fluctuations.
* In Q4 CY2024, Levi's reported 12% revenue growth, outpacing estimates.
* Analysts project 1.7% revenue growth for the next 12 months, suggesting limited growth prospects from new products and services.

Cash Flow:

* Levi's free cash flow margin has averaged 6.3% over the last two years, below industry norms.
* In Q4, free cash flow margin was 12.6%, in line with last year's comparable period.

Key Takeaways:

* Levi's exceeded revenue expectations in Q4.
* Full-year EPS guidance missed analysts' estimates.
* Despite a decent quarter, the stock declined on disappointing outlook.
* A comprehensive stock analysis is necessary for investment considerations.