At 167 years old, Levi Strauss and Co. (NYSE:LEVI) is certainly one of the oldest American companies still operating. But after only one year on the New York Stock Exchange and a dropping price for much of this latest spell as a publicly traded company, it's still not getting much attention.

However, the company has a solid and growing business, and with the original formula for classic blue jeans, it might be worth talking about.

Why it's a great business

Like Coca-Cola or Nike, Levi's is the classic in its category that doesn't go out of style. Because its merchandise is so laser-focused on a niche product, the company is less susceptible to changing styles. The popularity of its core products gives it the support it needs to try out new products with less concern about failure, so it has been able to branch out into other categories as well.

Jeans lined up in a store.

Image source: Getty Images.

Levi's has two well-known brands: Levi's jeans and Dockers khakis. While Levi's literally defined blue jeans, having invented and patented them in 1873, Dockers determined the work-casual style ethic when it came onto the scene in 1986. While brands all over the world have copied the company's signature styles, Levi's remains the core classic.

Levi's was previously publicly traded but was taken private in the 1980s before coming back to the stock market last year. 

Still growing

While one might think a company like Levi's has already hit saturation, it continues to grow in the U.S. and even more in international markets. Levi's had what might be considered a victory in the first quarter of 2020 as it increased revenue and earnings, despite a downturn in Asian markets where the COVID-19 pandemic was raging at the time. 

That Q1 earnings report, released on April 7, showed a 5% revenue increase (6% in constant currency terms). Diluted earnings per share were $0.40 versus $0.38 in 2019. However, the company doesn't see that continuing into the second quarter, as most U.S. retail outlets (as well as many other stores globally) have been closed in response to efforts to halt the spread of the coronavirus.

The company's e-commerce business is strong, growing 12% in the 2020 first quarter and it now accounts for 15% of the total business. Wholesale has suffered as classic department stores continue to decline, but Levi's' direct-to-consumer business accounts for 40% of its total. That grew 22% in the U.S. in the first quarter, giving the company decent room for continued growth, despite being a ubiquitous presence on American streets.

It's also seeing major international growth, like many U.S. retailers who have reached a level of saturation in the U.S. The Americas saw a 4% increase in sales in the first quarter, while European sales increased 10%. While Asian sales decreased due to COVID-19, e-commerce sales have already increased in the second quarter year-over-year.

The company has a lot going for it in this type of environment, including a strongly diversified supply chain, so it's not dependent on a single country or manufacturer. Interestingly, it's differentiated by its classic merchandise that can be carried over into the next season, while companies like Gap and H&M have canceled their orders for summer and fall, while acknowledging the need for heavy promotion to sell off current inventories.

Levi's should easily be able to weather the coronavirus storm with a liquid position of $1.8 billion and $56 million of net debt.

Maintaining a winning business

While the core iconic jeans segment is the company's main revenue driver, Levi's has launched many new initiatives, such as Denizen, which it introduced in 2011, and is seeing success in other categories, such as women's tops. It continues, however, to pump up marketing for its main segment to stay relevant, with strong ad campaigns and celebrity endorsements. 

"Our first quarter results underscore the strength of the Levi's brand and the efficacy of our strategies to diversify our business, both of which will be crucial to coming out of the current crisis stronger than ever," according to CEO Chip Bergh.

In terms of U.S. saturation, besides its new products and digital business, Levi's may ultimately benefit from the current crisis if competitors fold. True Religion, a jeans brand, for example, recently filed for bankruptcy, since it wasn't prepared for the crisis.

When stores are back up and running, Levi's is in an excellent position from which to march forward. The share price is down 34% year-to-date, despite increased revenue, as we can see clearly in this chart:

LEVI Chart

LEVI data by YCharts

Levi's price-to-trailing-earnings ratio is only 12.4, and with all its ducks in place to get back to increased sales growth, now might be a great time to buy Levi's stock.