LEVI Strauss forecast annual profit well below analysts’ estimates, taking a cautious stance despite a strong holiday quarter and sending its shares down about 8 per cent in extended trading on Wednesday (Jan 29).
The company’s struggling US wholesale business returned to revenue growth after six quarters of decline, as newness in its collections, including men’s apparel, attracted demand from retailers.
Still, executives on a post-earnings call said they expect the channel to be flat in 2025.
“We recognise there continues to be a lot of uncertainty related to the macro environment, potential changes in tariffs, as well as worsening foreign exchange… the best approach for us is to plan prudently,” finance head Harmit Singh said.
The company projected annual adjusted profit per share of US$1.20 to US$1.25, compared with expectations of US$1.37, according to data compiled by LSEG.
The forecast “underscores the uncertainty facing many retailers as they struggle to navigate President Trump’s tariff threats and a more unpredictable environment – although Levi’s limited exposure to China, Mexico, and Canada means it is better equipped than most to navigate those headwinds”, said Rachel Wolff, analyst at EMarketer.
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Levi introduced an organic revenue growth target of 3.5 to 4.5 per cent for fiscal 2025, excluding the impact of divested business and foreign exchange rates.
It expects reported net revenue to fall between 1 per cent and 2 per cent. Analysts had estimated 2025 revenue to rise 3.7 per cent.
In the holiday quarter, customers bought Levi’s trendy denim dress collection and wide-legged bottoms, lifting net revenue 8 per cent to US$1.84 billion and beating estimates of US$1.73 billion.
Under Michelle Gass, who completed one-year at the top in January, Levi has trimmed its portfolio and focused on its direct-to-consumer channel.
Excluding items, the company earned 50 US cents per share in the reported quarter, topping estimates by 2 US cents. REUTERS
