By Paul R. La Monica

A good pair of jeans can be in style for a long time. The same could be said for shares of denim giant Levi Strauss.

The company is set to report its first-quarter earnings on April 7, and analysts are expecting solid results as it looks to move past tariff headwinds. Levi Strauss, or Levi's, as it is commonly known, has raised prices over the past year to mitigate the impact of tariffs. The strategy seems to be working. Wall Street is forecasting an 8% sales increase in the quarter.

"Top-line issues have now firmly been put to rest," said Wells Fargo Securities analyst Ike Boruchow in a March report. He pointed out that Levi's is benefiting from a shift to a direct-to-consumer strategy, selling more of its products digitally, both online and through its mobile apps, as well as at its own company-branded stores, as opposed to relying more on other apparel retailers.

Levi's said in the fourth quarter that DTC revenue accounted for nearly half of its total sales and that e-commerce revenue was up 22%. "This should allow Levi's to achieve greater scale and efficiency," Boruchow said, since the company will be able to reduce distribution costs. He called this is "a key driver to the story going forward."

Levi's is also finding success through diversification, focusing on more types of apparel than just jeans. About 25% of the growth in its last fiscal year was driven by categories outside denim, TD Cowen analyst Oliver Chen wrote after the company's fourth-quarter earnings in January.

"We remain encouraged by lifestyle brand and product development across men's and women's with the particular opportunity to sell more tops, dresses, and non-denim bottoms," Chen said. That should boost profits as well. Wall Street is predicting that earnings per share will be up 10% this fiscal year.

Analysts at Goldman Sachs also note the possibility that Levi's will get a marketing boost from this year's World Cup soccer tournament. Six games will be played at Levi's Stadium in Santa Clara, Calif., the site of this year's Super Bowl. Goldman said in a report that it expects apparel companies to "highlight specific sport-inspired collections and campaigns which could prove to be beneficial."

Shares of Levi's have taken a hit this year, along with many consumer stocks, due to concerns about the potential negative impact of higher oil prices. The stock is down 8%. UBS analyst Jay Sole, who has a Buy on Levi's, said in a report in late March that "the recent macro volatility stemming from the Middle East conflict could cause [Levi's] to maintain a cautious stance around its full year outlook."

That's made Levi's a bargain. The stock, at a recent $19, is trading at just 12.8 times earnings estimates, compared with its five-year average of just below 14.8. Sole has a price target of $33 on Levi's, up nearly 75% from current levels. He argues that the company's valuation should be more in line with apparel peers such as Wrangler and Lee owner Kontoor Brands, Ralph Lauren, and Columbia Sportswear.

Levi's stock isn't as distressed as it might look.

Write to Paul R. La Monica at paul.lamonica@barrons.com

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April 01, 2026 10:40 ET (14:40 GMT)

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