Levi Strauss & Co Stock Falls After Mixed Q3 Results: EPS Beat, Revenues Miss

Levi Strauss & Co. LEVI shares are trading lower following the company’s third-quarter financial results released after Wednesday’s closing bell. Here's a look at the details from the report. 

The Details: Levi Strauss reported quarterly earnings of 33 cents per share, which beat the analyst consensus estimate of 31 cents. Quarterly revenue came in at $1.516 billion, which missed the analyst consensus estimate of $1.55 billion.

• DTC (Direct-to-Consumer) net revenues increased 10% on a reported basis and 12% on a constant-currency basis. DTC growth reflected a 12% increase in the U.S. and a 9% increase in Europe.
• Wholesale net revenues decreased 6% on a reported basis and 5% on a constant-currency basis. Adjusting for the exit of the Denizen business, wholesale net revenues declined 3%.
• Operating margin was 2.0% compared to 2.3% in the same quarter last year inclusive of an impairment charge of $111 million related to the Beyond Yoga acquisition.
• Gross margin increased 440 basis points to 60% from 55.6% in the same quarter last year primarily driven by lower product costs and favorable channel and brand mix.

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“The underlying fundamentals of our business are getting stronger, driven by the Levi’s® brand, which grew 5% globally in Q3, a significant acceleration from H1 and the highest revenue growth in two years. We are making progress against our strategic priorities, including double-digit growth in our direct-to-consumer business, continued positive performance in the U.S., and Europe inflecting to growth,” said Michelle Gass, CEO of Levi Strauss & Co.

Outlook: Levi Strauss sees fiscal year 2024 adjusted earnings at a mid-point of between $1.17 and $1.27 per share, versus the $1.25 estimate.

LEVI Price Action: According to Benzinga Pro, Levi Strauss shares are down 6.22% after-hours at $19.75 after dropping 2.86% in Wednesday’s regular trading session.

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Photo: Courtesy of Levi Strauss & Co.