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Levi Strauss shares under pressure amid warning on outlook

While Q3 earnings beat expectations, revenue missed forecasts and the company issued a warning for the full-year.

Earnings

Despite third quarter (Q3) earnings at Levi Strauss beating expectations, revenue missed forecasts and the company issued a warning for the full-year (FY). The stock will fall 5% at the open today after having fallen 4% during yesterday’s trade.

Video Transcript

Levi shares fall

Levi Strauss shares fell 5% in extended trade last night after the group cut its full-year profit forecasts. This is on top of the 4% drop during normal hours.

Levi Strauss posted earnings of $0.40 a share for the third quarter, $0.03 higher than consensus. Revenue missed expectations, though, as the denim maker has to deal with softening demand.

The strengthening dollar and persisting supply chain issues, with inflation at decade highs across the globe and a looming recession, consumers are moving away from these higher priced products and clothes generally to essentials such as food and energy.

The strengthening dollar is also affecting Levi Strauss' margins, down 60 basis points compared with this time last year at 56.9%.

The company now expects full-year 2022 adjusted profit of between $1.44 and $1.49 per share compared to prior forecasts of $1.50 to $1.56.

Now you can see during the session yesterday we saw this 4.0% drop. Add to that a 5% drop when we see shares opened today and you're in this area down here challenging the 1500 level.

So, we're watching that stock at the start of the day's trade after the outlook disappointed investors.


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