Prime Highlights:
Levi Strauss reported Q4 adjusted earnings of $0.50 per share, surpassing Wall Street’s forecast of $0.48 per share.
Q4 revenue reached $1.84 billion, a 12% increase from the previous year, exceeding expectations of $1.73 billion.
The company expects a 1% to 2% decline in sales, primarily due to currency exchange impacts, one fewer selling week, and divested businesses.
Key Background:
Levi Strauss & Co. reported better-than-expected earnings for its fiscal fourth quarter but provided a cautious outlook for the upcoming year, citing challenges stemming from unfavorable currency exchange rates, one fewer selling week, and a decline in revenue from divested businesses.
For the fourth quarter, Levi’s posted earnings of $0.50 per share, surpassing Wall Street’s expectations of $0.48 per share. Revenue for the quarter reached $1.84 billion, exceeding the $1.73 billion forecast. This represented a 12% year-over-year increase in sales. Excluding factors such as foreign exchange fluctuations and divested businesses, organic sales grew 8%. Net income rose to $182.6 million, compared to $126.8 million in the same period the previous year.
Despite the strong quarter, Levi Strauss cautioned that its fiscal 2025 performance would be impacted by macroeconomic pressures, including a robust U.S. dollar. The company anticipates a 1% to 2% decline in overall sales, well below analysts’ predictions of a 3.7% growth rate. The projected decline is attributed to currency headwinds, a shorter fiscal year, and the impact of divested business units, particularly in its Denizen and footwear segments.
Levi’s CEO, Michelle Gass, emphasized that the expected dip in revenue was not due to weaker consumer demand but rather external factors like currency fluctuations. Under her leadership, the company has made strides in appealing to female consumers and growing its direct-to-consumer sales. Gass has focused on expanding Levi’s women’s apparel offerings, including new styles and a partnership with Beyoncé, which has helped drive brand engagement.
Looking ahead, Levi Strauss aims to continue capitalizing on its successful direct-to-consumer strategy while navigating challenges in global markets. However, it remains optimistic about future growth, particularly in the growing athleisure segment, where its Beyond Yoga brand, despite facing some difficulties, continues to show long-term potential.