LEVI - Embedded Expectations Analysis - 2019 08 20
ï€ Levi Strauss & Co. (LEVI:USA) currently trades below corporate averages relative to Uniform Earnings, with a 14.9x Uniform P/E. At these levels, the market is pricing in expectations for Uniform ROA to contract slightly from 13% in 2018 to 12% in 2023, and management is concerned about future growth, their e-commerce platform, and the foot trafficï€ Specifically, management may be concerned about the sustainability of recent revenue growth, and they may be concerned about their ability to sustain recent growth rates across Europe and Asia. Moreover, they may be exaggerating the value of their rewards program, and they may be concerned about their ability to leverage their apps for marketing purposes. In addition, management may be concerned about continued weakness in the U.S. market for jeans and about the sustainability of higher foot traffic in stores. Finally, they may lack confidence in their ability to sustain recent e-commerce growth, and they may be concerned about continued declines in free cash flow.
Levi Strauss & Co. is an apparel company. Under its Levi's?, Dockers?, Signature by Levi Strauss & Co.? and Denizen? brands, the company designs, markets and sells, directly or through third parties and licensees - products that include jeans, casual and dress pants, tops, shorts, skirts, jackets, footwear, and related accessories for men, women and children around the world. The company licenses its Levi's? and Dockers? trademarks for a variety of product categories in multiple markets in each of its regions, including footwear, belts, wallets and bags, outerwear, sweaters, dress shirts, kidswear, sleepwear and hosiery. The company's operates its business via three geographic regions: Americas, Europe and Asia.
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