Levi Strauss 2023 Stock Dips After Lowering Revenue Forecast Amid Economic Challenges
Levi Strauss faced a revenue shortfall in Q3 2023 and revised its annual outlook downward due to economic uncertainties impacting consumer spending.
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Key Highlights
- Levi Strauss fell short of quarterly sales predictions and reduced its full-year revenue guidance amid ongoing economic uncertainties affecting consumer demand.
- Sales dropped in North America and Europe, while robust growth in China drove gains in the Asian market.
- The company attributed weaker sales to economic pressures on consumers compounded by an unusually hot summer season.
Levi Strauss & Co. (LEVI) reported Q3 fiscal 2023 revenue of $1.51 billion, slightly below the $1.54 billion expected by analysts, reflecting steady performance compared to the previous year. Earnings per share (EPS) stood at $0.28, marginally surpassing estimates by $0.01.
Revenue declined by 5% in North America and 2% in Europe, whereas Asia experienced a 12% increase, fueled by strong demand in China. Revenue from other brands grew 12%, with Dockers rising 9% and Beyond Yoga surging 25%. Direct-to-consumer sales improved by 14%, offsetting an 8% decrease in wholesale revenue.
CEO Chip Bergh highlighted that consumer spending was constrained by the uncertain economic landscape and the impact of hot summer weather on sales.
Chief Financial and Growth Officer Harmit Singh emphasized a cautious outlook for Q4, citing persistent macroeconomic uncertainties.
Levi now forecasts a full-year revenue increase of approximately 1%, down from the prior estimate of 1.5% to 2.5%, with EPS expected near the lower bound of the $1.10 to $1.20 range.
Following the announcement, Levi Strauss shares traded close to a three-year low reached last month.
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