Levi Strauss (NYSE:LEVI) & Co. LEVI is likely to register top- and bottom-line growth when it reports second-quarter fiscal 2021 numbers on Jul 8. The Zacks Consensus Estimate for quarterly earnings has been stable at 9 cents over the past 30 days. Meanwhile, the company incurred a loss per share of 48 cents in the year-ago quarter. Moreover, the consensus estimate for quarterly revenues stands at $1,212 million, which indicates a significant increase from $498 million reported in the year-ago quarter.
In the last reported quarter, the company delivered an earnings surprise of 41.7%. Notably, this apparel company has an earnings surprise of 54.5%, on average, for the trailing four quarters.
Key Factors to Note
Levi Strauss’ performance for the fiscal second quarter is most likely to have benefited from the company’s omni-channel initiatives and strength in brands. The company has been increasing investments in stores and e-commerce businesses for a while now. Its NextGen stores offering digitally-connected experience are performing well. Impressively, it is also steadily accelerating omni capabilities including Buy Online, Pick-up In Store, line-queuing, same-day delivery, appointment scheduling and mobile checkout. Moreover, the company is piloting in-store features including contactless returns and self-checkout. Additionally, its wholesale channel is consistently transforming with a greater share of business in digital, mass, premium and with financially-sound retailers. All these factors might have aided the company’s performance in the quarter under review.
On its last earnings call on Apr 8, management had projected 24-25% revenue growth from the year-ago reported figure for the first half of fiscal 2021. This outlook reflected revenue growth of around 140% for the fiscal second quarter. The company also envisioned adjusted earnings per share of 7-8 cents for the same period, bringing first-half adjusted earnings to 41-42 cents.
Although Levi Strauss has been navigating the impacts of the pandemic for sometime now, it had earlier assumed that the store closures in Europe will persist through mid-May. Consequently, management had anticipated the results of operations including revenues, earnings and cash flow to continue hurting significantly at least through the fiscal second quarter.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict 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 odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Although Levi Strauss currently has a Zacks Rank #2, its Earnings ESP of -14.29% makes surprise prediction difficult.
Stocks Poised to Beat Earnings Estimates
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to beat on earnings:
Abercrombie & Fitch ANF currently has an Earnings ESP of +11.30% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Foot Locker (NYSE:FL) FL has an Earnings ESP of +8.95% and a Zacks Rank of 1 at present.
Boot Barn (NYSE:BOOT) BOOT has an Earnings ESP of +2.42% and is Zacks #1 Ranked, presently.
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