What happened

Levi Strauss (LEVI 2.08%), the timeless apparel maker, had a stunning debut in its IPO today, rising 33.8% to $22.75 out of the gate at 12:04 p.m. EDT, a bullish sign for the stock after it was reintroduced to the public markets after going private in the 1980s.

So what

Levi's shares priced at $17, above their expected range of $14 to $16, showing investor enthusiasm for the stock despite a cloudy outlook for the broader apparel industry. The iconic jeans maker was poised to offer as many as 42.2 million shares, though the majority of those would come from existing shareholders rather than new shares from the company. In its S-1 filing, Levi's said it expected to reap net proceeds of $120.8 million from the IPO, but that could rise by another $88.5 million if the underwriters exercise their option to buy another 5.5 million shares at the IPO price, which seems likely given the stock's surge today.

Several women modeling Levi's jeans.

Image source: Levi's.

Levi's, which was founded in 1853, enters the public markets on an upswing, as the business has recovered in recent years under the guidance of former Procter & Gamble executive CEO Charles Bergh. He has invested in marketing, new stores, technical fabrics and other innovations, and focusing the product line beyond jeans by expanding its selection of tops and women's products.

As a result, revenue jumped 14% to $5.6 billion last year, while operating income increased 15% to $537 million. At a time when many of its rivals are closing stores and seeing declining foot traffic, those numbers are impressive and help to explain why the stock surged today.

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Now what

Despite Levi's solid growth recently, investors should ask a few key questions before diving into the stock. The company will have to consistently buck the headwinds against the brick-and-mortar retail industry to outperform the market and at the same time resist the "athleisure" trend that's favored apparel stocks like Lululemon.

While its recent success should reassure investors, at a P/E over 20, the stock will trade at a significant premium to its peers. We'll find out soon if Levi's deserves it.