"Levi Strauss ( NYSE: LEVI) and VF Corporation ( NYSE: VFC) just wrapped their latest quarters, showing two apparel giants moving in opposite directions. Levi delivered Q3 revenue of $1.54 billion with 7% growth and a 61.7% gross margin. VF posted Q2 revenue of $2.80 billion with 1.6% growth and a 52.2% gross margin. One is executing cleanly. The other is drowning in debt."
"Denim Focus Beats Portfolio Complexity Levi's Q3 beat expectations by 13.3%, marking eight consecutive quarters of EPS surprises. The company's $0.34 reported EPS crushed the $0.30 estimate, driven by direct-to-consumer strength and international expansion. CEO Chip Bergh has kept the strategy simple: own the premium denim category, push digital channels, and keep the supply chain tight. Inventory sits at $1.29 billion against $613 million in cash-a-manageable 2.1x ratio."
"VF's Q2 showed $0.52 EPS, beating estimates by 23.8%, but that positive surprise came after a catastrophic Q1 2024 miss of negative 3,300%. The portfolio includes The North Face, Vans, and Timberland, but complexity isn't translating to margin power. VF's 52.2% gross margin trails Levi's by nearly 10 percentage points. Operating margin is comparable at 11.2% versus Levi's 10.8%, but VF carries $5.79 billion in total debt."
Levi Strauss posted Q3 revenue of $1.54 billion, up 7%, with a 61.7% gross margin and $0.34 reported EPS, beating estimates and marking eight consecutive EPS surprises. Direct-to-consumer sales and international expansion drove performance while inventory of $1.29 billion versus $613 million in cash yielded a manageable 2.1x ratio and ROE of 25.9%. VF Corporation reported Q2 revenue of $2.80 billion, up 1.6%, with a 52.2% gross margin and $0.52 EPS following a severe Q1 miss. VF's diverse brand portfolio is creating operational drag, with inventory pressures at Vans, competition for The North Face, Timberland weakness, and $5.79 billion in total debt.
Read at 24/7 Wall St.
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