By
Bloomberg
Published
Jun 27, 2024
Denim maker Levi Strauss & Co. fell in late trading after the company reported sales in its latest quarter that slightly missed expectations, underscoring Wall Street’s high expectations for the company.
Revenue was $1.44 billion in the company’s fiscal second quarter which ended May 26 — just short of the average analyst estimate of $1.45 billion. Profit beat expectations but the company reaffirmed its full-year outlook.
The shares fell 12% at 5:05 p.m. in late New York trading. Levi stock has advanced 40% so far this year through Wednesday’s close.
“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,” said Neil Saunders, retail managing director at GlobalData. He added that full-year guidance is “quite cautious given that last year revenues came in flat.”
San Francisco-based Levi sees full year earnings per share, excluding some items, in a range of $1.17 to $1.27, with the average analyst estimate at $1.27.
The company’s top executives said their efforts to sell more apparel directly to consumers via Levi’s own stores and website are bolstering profitability, and will help to offset any broader weakness among consumers.
In an interview, Chief Financial and Growth Officer Harmit Singh cited upcoming elections in the US, France and the UK, adding that economic uncertainty has “become a part of life” for most companies. He said that gross margin, which surpassed market expectations in the most recent quarter, is expanding due to the company’s focus on women’s apparel and its own sales channels.
