Teaming up with Beyonce could help supercharge our sales, particularly in the women’s category, Michelle Gass – the chief executive of Levi Straus & Co (NYSE: LEVI) argued in a recent interview with Jim Cramer.
Levi’s rolled out a new ad campaign featuring the iconic pop singer Beyonce on Monday, which followed the release of “LEVII’s JEANS” – a track on her album “Cowboy Carter” that came out in March.
The Beyonce partnership and the potential boost to sales is particularly significant considering Levi’s came in shy of revenue estimates for its third quarter and lowered its full-year guidance on Wednesday.
Levi’s stock was down nearly 10% at the time of writing this report.
Levi’s is committed to its women’s category
Levi’s has a history of working with “Queen Bey” that goes back to the early 2000s.
The clothing company is fully committed to accelerating its women’s business which it expects will double over time and generate at least half of its overall sales.
“You bring Beyonce into the ecosystem, we think we’re just set up for the long term really, really well,” as per Michelle Gass.
On Mad Money, the chief executive went on to attribute much of the weakness in Levi’s latest reported quarter to China, Mexico, and its Dockers brand.
The New York-listed firm is looking for a possible suitor for Dockers as it has “underperformed for quite some time.”
Levi’s is laser-focused on improving its revenue in the fourth quarter and carrying it through into 2025, she added.
Should you buy Levi’s stock on post-earnings weakness?
CEO Michelle Gass agreed that some of the quarterly weakness in China and Mexico was related to internal execution issues but said the company is already taking measures to fix them.
Levi’s reported a 19% year-on-year growth in Beyond Yoga in its third quarter but the chief executive remains convinced that it’s a “huge opportunity” that’s only in its “earning innings” at the moment.
All in all, she’s confident that things will only get better for Levi’s in 2025 – and if her optimism is to be believed, loading up on shares of Levi Strauss & Co. on today’s weakness won’t be the worst of ideas.
Wall Street also currently has a consensus “overweight” rating on Levi stock with an average price target of $22.58 which indicates potential for a more than 15% upside from here.
Additionally, the company based out of San Francisco, California pays a dividend yield of 2.69% as well.
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