|Instrument:levi strauss & co|
Levi Strauss & Co. is an American apparel company that designs, markets, and sells clothing products such as jeans, casual wear, and other related accessories for men, women, and children. Levi Strauss sells its products under popular brand names such as Levi’s, Dockers, Signature, Denizen, and Beyond Yoga. The company also licenses its brand names to third-party manufacturers of accessories such as belts, footwear, outerwear, sleepwear, kids’ wear, wallets, and hosiery. Levi Strauss & Co. was founded in 1853 by Levi Strauss and is headquartered in San Francisco, California.
Levi Strauss has been a company defined by innovation and is credited with the invention of the iconic blue jeans in 1873, a clothing item that has arguably been the most worn and imitated throughout history. Other notable creations and innovations of the company include bicycle pants, denim playsuits for kids, the first ladies’ trousers, and most recently, curve ID jeans for ladies. The company sells its products through its own branded stores and eCommerce sites and through franchises, third-party retailers, departmental stores, and speciality retailers. Its direct consumer sales via online channels have grown remarkably in recent years, but the company has not shifted its focus away from its brick-and-mortar footprint. After successful piloting in Europe and Asia, Levi Strauss officially launched its NextGen stores and Tailor Shops that have been billed as the future of retail. These stores utilise technology to meet the local consumer needs of style, design, and customisation. Levi Strauss has always pursued organic growth by emphasising in-house innovation, but the company is also a strategic player in the M&A pool. Its most recent deals include the acquisitions of The Jeans Company and Beyond Yoga.
Levi Strauss & Co. is listed on the NYSE, where its stock trades under the ticker symbol LEVI. The stock is categorised in the Consumer Cyclical sector, under the Apparel Manufacturing industry.
LEVI Stock History
Levi Strauss went public on March 21st, 2019, with an IPO price of $17. The stock was an instant hit on its first day, with its price climbing and settling above $20. But it struggled to keep the momentum going, and by August 2019, LEVI stock had dipped to just above $15.
The stock managed to climb above $20 in January 2020, but the effects of the coronavirus-inspired economic slump dragged LEVI stock to lows of below $10 by April 2020. The stock, however, moved in tandem with the broader stock market during the post-pandemic recovery and managed to steadily climb to its all-time high of just above $30 in May 2021 (as of October 2021). A brief period of correction then ensued, but LEVI stock continued to settle above $25.
Levi Strauss & Co. is a willing dividend payer, but the nature of its business means that payouts will be very much dependent on performance.
How to Trade LEVI Stock
Here are some of the factors to consider when trading LEVI stock:
- Legislative and Taxation Issues
As a major global manufacturer, Levi Strauss faces unique legal challenges such as environmental impact, labour concerns, and counterfeits. The company has, in recent years, had to engage regulators in a bid to ensure that its operations are sustainable. It has been said that Levi Strauss operations are very thirsty, with its manufacturing plants consuming more water than the annual needs of the US population. These regulatory demands can impact the bottom line of the company. The company also has to deal with different taxation regimes in the over 110 jurisdictions that its products are sold in.
- Raw Material Prices
Cotton accounts for over 90% of Levi Strauss’s raw materials demands. This means that the company’s bottom line is very vulnerable to price fluctuations of the fluffy commodity. High cotton prices can force the company to adjust the prices of its products higher, and this can limit sales. On the flip side, lower cotton prices could help boost the company’s bottom line.
Competition in the apparel industry is fierce and always evolving. Levi Strauss has to deal with important players such as Nike, GAP, Zara, Gucci, H&M, Tommy Hilfiger, Under Armour, Urban Outfitters, Ironclad Performers Wear, Ralph Lauren, and Wrangler. Competition is based on quality, new product rollouts, pricing, design, style, and customisation features. In addition to these high title players, the company also has to deal with cheap counterfeits in jurisdictions where there are no proper laws against counterfeits.
- Periodic Earnings Reports
Levi Strauss & Co.’s fiscal year runs from December to November. The company releases quarterly earnings reports that highlight its business health and performance in the market. In these reports, investors can find out about any dividend payouts, as well as important business metrics such as sales by geographical regions, sales by product categories, overall revenues, and online sales. Typically, positive numbers can inspire higher LEVI stock prices, whereas negative ones can trigger lower prices.
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