Wells Fargo has recently upgraded Levi Strauss & Co. from “Equal Weight” to “Overweight,” reflecting increased confidence in the company’s strategic direction and financial performance. This upgrade is underpinned by Levi’s robust earnings, effective cost management, and a successful pivot toward a direct-to-consumer (DTC) model.
🧵 In the latest quarter, Levi reported earnings per share of $0.38, surpassing analyst expectations of $0.28. Revenue reached $1.53 billion, marking a 3.1% year-over-year increase. Notably, the DTC segment experienced an 8% growth, now constituting 47% of total sales, which has helped offset challenges in the wholesale sector.
The company’s dividend fundamentals are equally compelling. Levi offers an annual dividend of $0.52 per share, yielding approximately 3.23%. With a payout ratio of 58.43%, the dividend is well-supported by earnings. The company has a history of consistent dividend payments, with recent increases reflecting a commitment to returning value to shareholders.
Levi’s strategic focus on expanding its DTC operations, coupled with disciplined financial management, positions the company for sustained growth. The recent analyst upgrade underscores the market’s recognition of Levi’s resilience and adaptability in a dynamic retail environment.