Levi Strauss, a renowned jeans maker based in San Francisco, announced a downward revision in its fiscal year forecast after reporting a loss in the latest quarter. This update resulted in a 7.5% decline in the company’s shares during after-hours trading, with a new price per share of $13.17.
The revised outlook now predicts a revenue growth range of 1.5% to 2.5% for the year ending in November, which is lower than the previous estimate of up to 3%. Three months ago, Levi Strauss had maintained its guidance for the year, expecting full-year revenue to reach $6.3 billion to $6.4 billion.
In addition to the revenue adjustments, the company’s updated forecast for adjusted earnings per share is now $1.10 to $1.20, falling short of the initial projection of $1.30 to $1.40.
These downward revisions in outlook come as Levi Strauss grapples with a significant decline in both wholesale revenue and sales in the Americas region during the fiscal second quarter. Wholesale net revenue experienced a 22% dip, mirroring the 22% decline in sales specifically within the Americas region.
On a more positive note, direct-to-consumer sales in the Americas saw a 6% increase, attributed to strong performances across both physical stores and online channels.
It remains to be seen how Levi Strauss will navigate these challenging circumstances and make adjustments to mitigate the impact on their fiscal year results.