How Levi Strauss Can Overcome Its Biggest Weakness
Levi Strauss (NYSE: LEVI) is the top jeans brand in the world, but it's been a rough outing for the stock since it began trading in March of this year, with the stock price down 25% since the IPO. One of the main reasons for investor pessimism has been the weakness in the wholesale market, which makes up about two-thirds of Levi's business.
The denim market is expected to grow modestly through 2023, but Levi Strauss is suffering from the wave of retail store closings in the U.S., which caused a drop of 2% in the U.S. wholesale business in the second quarter. This decrease weighed on sales in the Americas region, which grew just 3% year over year, versus 9% in Europe and 6% in Asia.
The stock price has been under pressure, as market participants wanted to see better performance. But there are a few ways that Levi Strauss can overcome the near-term weakness in the U.S. wholesale business and deliver the growth that investors expect.
Source Fool.com
