Levi Strauss & Co. (NYSE: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.
"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.