Levi's Shares Climb Amid Interest Rate Optimism, Yet Tariffs and Weaker Demand Weigh on Future Prospects

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Levi's Shares Climb Amid Interest Rate Optimism, Yet Tariffs and Weaker Demand Weigh on Future Prospects

Bitget-RWA2025/11/24 20:20

By:Bitget-RWA

- Levi's shares rose 3.4% amid Fed rate-cut optimism, but CEO warned tariffs remain a supply chain challenge. - Trade barriers force operational adjustments as tariffs shift from temporary disruptions to long-term costs. - Analysts highlight sluggish demand and 3.2% projected growth, citing margin pressures and brand relevance concerns. - Stock trades at 14.4x forward earnings, underperforming rivals like VF Corp. amid evolving consumer spending patterns.

Levi Strauss & Co. saw its shares climb 3.4% on Friday, lifted by renewed hopes for Federal Reserve interest rate cuts. However, the apparel company’s CEO cautioned that ongoing uncertainty around trade policies continues to pose significant challenges for global supply chains. The stock’s upward movement

reflected the overall positive sentiment in the market

after New York Fed President John Williams suggested there could be "additional room for adjustment" in monetary policy, raising the likelihood of a December rate reduction to 73%, up from 39%. Still, CEO Chip Bergh recently pointed out that "there’s a limit to how much you can offset the tariffs, as they remain extremely high," indicating that trade restrictions will keep influencing business decisions for the foreseeable future

as highlighted in recent research

Levi’s stock performance stood out among its apparel industry peers. While

Levi’s

gained 3.4%, competitor Ralph Lauren Corp. Cl A saw a smaller 3.95% increase, falling short of VF Corp.’s 10.80% surge

based on market statistics

. Experts linked Levi’s mixed outcomes to broader issues in the textile sector, such as changing consumer spending habits and the ongoing effects of trade tariffs.

One recent study observed

that tariffs have shifted from being short-term obstacles to becoming "built-in operational factors" for businesses, requiring changes to manufacturing schedules and marketing approaches. For Levi’s, this environment means dealing with high import taxes on cotton and finished products, which squeeze profit margins and cause shoppers to postpone non-essential purchases

according to the study

Levi's Shares Climb Amid Interest Rate Optimism, Yet Tariffs and Weaker Demand Weigh on Future Prospects image 0

Even with the recent stock rally, some market watchers remain wary about Levi’s future growth.

A new evaluation pointed out

the company’s "weak demand" and subpar growth when adjusted for currency fluctuations, forecasting only a 3.2% sales rise in the coming year. The analysis also noted declining returns on investment and stressed the need for substantial spending on product development to spark renewed expansion. Currently, Levi’s trades at 14.4 times projected earnings, which is lower than the market average but

signals ongoing worries

about the brand’s appeal and profit margins.

The broader apparel industry’s difficulties highlight the struggle to reconcile trade policy challenges with shifting consumer tastes. As tariffs continue to alter global supply networks, companies like Levi’s must manage higher expenses and adapt to changing customer behavior.

Another report indicated

that more households are postponing major purchases, leading to unpredictable demand and complicating inventory planning. For Levi’s, this means fine-tuning its product rollout and digital strategy while competing in a market where rivals such as VF Corp. and Tapestry Inc. have recently outperformed

according to industry data

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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