From CNBC: 2025-01-29 16:56:51

Levi Strauss issued a disappointing forecast for its fiscal year due to currency exchange rates, fewer selling weeks, and losses in revenue from Denizen and footwear businesses. Sales are expected to decline 1-2% and adjusted earnings per share to fall below estimates. Shares dropped 6% in extended trading.

Despite the gloomy forecast, Levi ended fiscal 2024 on a high note, reporting earnings and sales that exceeded expectations. Earnings per share were 50 cents adjusted, versus 48 cents expected, and revenue was $1.84 billion, compared to $1.73 billion expected.

Since CEO Michelle Gass took over, Levi has made strategic changes to boost profitability and attract more female customers. A marketing partnership with Beyonce was successful in driving demand. Women’s apparel now accounts for 36% of Levi’s business, with a goal to reach 50%.

Levi saw strong sales growth across all regions, brands, and channels during the quarter. Direct-to-consumer sales increased by 19%, accounting for 45% of total organic net sales. Wholesale revenues, which have been weak industry-wide, grew by 7%.

Levi’s finance chief, Harmit Singh, addressed concerns about Trump’s proposed tariffs. Less than 1% of Levi’s products come from China, and exposure to Canada and Mexico is minimal. Levi plans to minimize impact on consumers by working with suppliers to address any cost increases.

Levi reported a record gross margin of 61.3% during the quarter, driven by lower costs and a favorable revenue mix. However, the company incurred $111.4 million in impairment charges related to its Beyond Yoga brand. Despite challenges, Levi is optimistic about the growth potential of the athleisure category under new leadership.



Read more at CNBC:: Levi Strauss (LEVI) earnings Q4 2024