American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

Levi’s guidance does not factor in tariffs, but the impact could be huge

by admin April 8, 2025
April 8, 2025
Levi’s guidance does not factor in tariffs, but the impact could be huge

Levi Strauss & Co (NYSE: LEVI) shares are gaining after the jeans company said it was leaving its guidance unchanged for the full year.  

But there’s a caveat: its outlook includes “no impact from the proposed tariffs”, which could be a major red flag that warrants pulling out Levi’s stock on the post-earnings strength.

Levi’s relies rather significantly on countries other than the US for manufacturing, which suggests it’s not particularly well-positioned to navigate tariffs and a subsequent trade war that’s emerging.

Despite its post-earnings rally, LEVI is down some 25% versus its year-to-date high at writing.

Levi’s relies heavily on China and Vietnam

Levi’s makes million of products every year in Vietnam and China, both of which have been hit with heavy tariffs under the Trump administration.

Vietnamese imports are now subject to 46% duties in the United States while Chinese imports have been slapped with an additional 34% tariff.

This could prove significant for Levi’s given it currently has 50 factories in Vietnam and another 130 in China.

In fact, the apparel giant no longer manufactures jeans in the US.

It has shifted production to several other countries in pursuit of lower labour costs, including India, Pakistan, and Bangladesh. Versus their 52-week high, Levi’s shares are currently down about 40%.

Tariffs could hurt Levi’s profitability

On the earnings call, Levi’s chief of finance Harmit Singh said the tariffs situation said it was hard to evaluate the potential impact from tariffs as the development is quite unprecedented.

However, it’s reasonable to believe that the effect will likely be significant given “the supply chain for lifestyle brands is entrenched in Asia and not easily relocated,” as per Stifel analyst Jim Duffy.

Duffy does not expect names like Levi’s to attract a lot of investor interest as Trump tariffs could mean a significant hit to their profitability moving forward.  

However, Levi’s shares currently pay a rather lucrative dividend yield of 3.85% that makes them a bit more attractive to own at writing.

Is it worth investing in Levi’s stock

Levi’s continues to see up to $1.50 a share of earnings this year on as much as a 2% sales decline.

For Q1, the NYSE listed firm reported $1.53 billion in revenue on 38 cents of adjusted EPS last night.

Analysts, in comparison, were at $1.54 billion and 28 cents, respectively.

In the press release, chief executive Michelle Gass touted the company’s global footprint, strong margin structure, and agile supply chain position” that she believes positions LEVI well to navigate the challenging environment.

Investors should also note that despite tariffs related headwinds, Wall Street remains bullish on Levi’s stock.

The consensus rating currently sits at “overweight” with the mean target of about $20 indicating potential upside of more than 35% from here.

The post Levi’s guidance does not factor in tariffs, but the impact could be huge appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
SCHD ETF: Top 3 reasons to buy the dip of this dividend stock
next post
China digs in, vows to ‘fight to the end’ if US imposes new tariffs, escalating trade war

Related Posts

Johnson & Johnson to pay $6.5 billion to...

May 7, 2024

Shell offloads Singapore refinery to Chandra Asri-Glencore joint...

April 1, 2025

Can EV charging electrify Europe’s economic future?

November 22, 2024

Chinese stocks soar, posting best weekly gains since...

September 27, 2024

Stocks fall as comeback rally falters; Dow lower...

August 9, 2024

Is it time to pull out of high-flying...

May 31, 2025

Twilio stock price soared in 2024: Technicals point...

December 26, 2024

Indian markets close: Sensex plunges 589 pts, Nifty...

April 26, 2025

Taiwan probes 11 Chinese firms, alleges SMIC poached...

March 29, 2025

Hang Seng, China’s CSI 300 slip after US...

January 7, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Trump wants Apple to shift iPhone production from India to the US: here’s what it means

      May 18, 2025
    • Inflation outlook in 2025: what April’s soft data isn’t telling you

      May 18, 2025
    • Rich List 2025: UK billionaires decline for first time in years amid market turmoil

      May 18, 2025
    • Novo Nordisk CEO to step down as obesity drug competition intensifies

      May 18, 2025
    • Argentina’s black market for dollar falters as President Milei dismantles currency controls

      May 18, 2025

    Categories

    • Business (2,979)
    • Investing (2,438)
    • Latest News (1,990)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved