Despite beating on the top and bottom lines and raising full year revenue guidance, shares of the denim company are down over 10% today as management stated on the earnings conference call that second half growth is expected to moderate relative to the first half, particularly in the United States.
While few dispute the quality of Levis products, this may be exactly why investors should be cautious. The quality is so good that you simply don't need to buy a new pair of jeans every month. There isn't that recurring revenue stream that investors look for.
However, there are some reasons to be optimistic about the company's future such as management's efforts to digitize clothing by collaborating with Google on the Jacquard denim jacket, which is a smart jacket that allows users to control devices such as a phone with a swipe of the sleeve.
For more in-depth coverage of Levi's get over to RealMoney.com
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