Levi Strauss Stock Looks Attractive

On July 8, 2021, Levi Strauss reported their fiscal Q2 2021 earnings results for the quarter May 2021. Non-GAAP EPS was $0.23, beating consensus analyst estimates by $0.14. Topline revenue growth was up 156.5% year-over-year (YoY) to $1.28 billion versus the $1.21 billion analyst estimates. Gross margins hit records at 58.8% driven by higher direct-to-consumer net revenues, price increases, sourcing savings, lower promotions, and more full-price selling. Ecommerce from all digital channels grew 75% YoY. Ecommerce penetration rose to 23% of total sales. Levi’s CEO Chip Bergh stated:

Levi Strauss raised guidance for fiscal full-year 2021 to be in the range of $1.29 to $1.33 versus $1.15 consensus analyst estimates. The Company expects 2H 2021 revenue growth of 27% to 29% versus the current consensus of 24% resulting in a 4% to 5% growth versus 2019. Levi’s also increased the quarterly dividend to $0.08 per share from $0.06 per share. Levi’s CFO Harmit Singh commented:

Levi Strauss CEO Bergh set the tone:

He noted this was the third quarter of consecutive record gross margins. He continued:

CEO Bergh all addressed investor’s concerns of DTC drop-off as stores reopen:

He concluded on the subject of data-driven predictive analytics:

Using the rifle charts on a weekly time and daily time frames provides a precision view of the landscape for LEVI stock. The weekly rifle chart has a strange rising 5-period moving average (MA) and flattening 15-period MA on a downtrend. The weekly stochastic has a stochastic mini pup. The strong resistance sits near the $30.01Fibonacci (fib) level. The weekly Bollinger Bands (BBs) have been compressing at $27.55 upper BBs and $22.16 lower BBs. The weekly market structure high (MSH) sell triggers under $27.31. The daily rifle chart is in an active downtrend with a falling 5-period MA at $27.05 with lower BBs at $25.92. The daily market structure low (MSL) buy triggered on a breakout above the $24.36 level. Prudent investors can monitor for opportunistic pullback levels are at the $25.92 fib, $25.25 fib, $23.50 fib, $23.60 fib, $22.74 fib, and the $22.31 fib. Upside trajectories range from the $32.53 level up to the $45.41 fib level.

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