Levi Strauss Sees Gloomy FY25 Despite Solid Q4, Stock Slides

Shares of clothing major Levi Strauss & Co LEVI are trading lower in premarket on Thursday.

Levi Strauss had provided a weaker outlook for FY25, expecting revenues to decline (1)% – (2)%. The company sees FY25 adjusted EPS of $1.20 – $1.25 against an estimate of $1.37.

The Denim jeans maker reported a fourth-quarter FY24 sales growth of 12% year-on-year to $1.840 billion, beating the analyst consensus estimate of $1.728 billion.

Adjusted EPS of $0.50 beat the consensus estimate of $0.48.

Revenues in the Americas, Europe and Asia increased 12%, 15% and 9% respectively. Global DTC net revenues jumped 19%, Wholesale net revenues grew 7% Y/Y, and net revenues from e-commerce grew 19%.

The gross margin expanded 350 basis points to 61.3%, driven by lower product costs.

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The operating margin expanded 230 basis points to 11.5%, and the Adjusted EBIT margin of 13.4%, up from 12.2% in fourth-quarter FY23. Adjusted EBITDA for the quarter was $301.2 million.

Levi Strauss’ cash and equivalents stood at $690 million as of December 1, 2024. Total inventories decreased 4% on a dollar basis.

In the fourth quarter, the company returned $51 million to shareholders in the form of dividends representing a dividend of $0.13 per share, up 8% from prior year, and share repurchases of about $30 million, reflecting 1.6 million shares retired.

As of December 1, 2024, the company had $590 million remaining under its current share repurchase authorization.

Operating cash flow for twelve months was $898.4 million compared to $435.5 million in 2023.

Price Action: LEVI shares are trading lower by 7.74% at $16.69 in premarket at the last check Thursday.

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