HomeIndustriesLevi's Cuts Profit Outlook Following Decline in Sales

Levi’s Cuts Profit Outlook Following Decline in Sales

Levi Strauss shares fell 7% on Friday after the company decided to cut its full-year profit outlook. The decision came after the fashion retailer suffered a 22% year-over-year decline in sales.

In addition to its crippling sales figures, the company attributed its decision to slash its economic outlook due to a challenging market where consumer demand is flailing as well as high inventory levels.

Given the current market outlook, Levi’s is looking to shift its business model in an effort to remain competitive and adjust to market trends.

“Our direct-to-consumer business is today about a little over 40% of our business,” CFO and chief growth officer Harmit Singh explained in an interview. “It was half this a decade ago when Chip and I joined. And our slated goal is for this business to be the majority of the business going forward.”

Singh explained that the goal is for Levi Strauss to become a “hybrid company” where all existing sales channels are retained, however, direct sales become the main operation going forward. The company’s shares have declined 15% for the year to date.

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