The denim manufacturer Levi Strauss & Co. saw a decline in late trading following the release of sales data for the most recent quarter that just undershot Wall Street’s lofty projections for the business.
The company’s fiscal second quarter concluded on May 26th, with revenue of $1.44 billion, barely above the average analyst projection of $1.45 billion. Although profit exceeded forecasts, the business maintained its outlook for the entire year.
At 5:05 p.m., in late New York trade, the shares dropped 12%. As of Wednesday’s close, Levi’s stock had increased 40% so far this year.
Neil Saunders, retail managing director at GlobalData, stated, “Although their sales growth looks OK, Wall Street was expecting more given the current popularity of denim and the fact Levi’s was up against a very soft comparative from 2023 when sales shrunk.” Considering that last year’s revenues were flat, he went on, “full-year guidance is quite cautious.”
Based in San Francisco With a few exceptions, Levi forecasts full-year earnings per share of $1.17 to $1.27, with an average analyst estimate of $1.27.
Top executives at the firm stated that increasing the amount of clothing sold to customers directly through Levi’s own stores and online is increasing profitability and would assist to counteract any wider weakening in the consumer market.
Future elections in the US, France, and the UK were mentioned by Chief Financial and Growth Officer Harmit Singh in an interview, who also said that for most businesses, economic uncertainty has “become a part of life.” He said that the company’s emphasis on women’s clothing and its own sales channels are to blame for the growing gross margin, which in the most recent quarter outperformed market forecasts.
