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.

The post Levi’s Cuts Profit Outlook Following Decline in Sales appeared first on theprimarymarket.com.

Levi managed to top the net revenue estimates of $1.62 billion by coming at $1.69 billion, while its adjusted earnings per share of $0.34 topped the EPS of $0.32 that the analysts expected. But the thing that didn’t work in the company’s favor was the gross margin of 55.8%.

The reported gross margin was 360 basis points short compared to 59.4% from the same period in 2022. It also failed to meet the expectations of analysts, who predicted 56.9%.

Some of the reasons for Levi’s declining gross margin were increased transportation costs and promotions that the company used to clear its inventory.

“We did get rid of inventory to the extent we could — that did hurt margins,” CFO Harmit Singh explained. “Promotional levels were slightly higher than anticipated.”

Levi Strauss & Co. stock (LEVI) dropped 16% to $15.14 per share on Thursday compared to the $18.03 close from the previous day. This is the biggest slide its shares have experienced since the company went public in 2019.

The post Levi Strauss & Co. Shares See a Record Drop Amid Declining Gross Margin appeared first on theprimarymarket.com.

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.

The post Levi’s Cuts Profit Outlook Following Decline in Sales appeared first on theprimarymarket.com.

Levi managed to top the net revenue estimates of $1.62 billion by coming at $1.69 billion, while its adjusted earnings per share of $0.34 topped the EPS of $0.32 that the analysts expected. But the thing that didn’t work in the company’s favor was the gross margin of 55.8%.

The reported gross margin was 360 basis points short compared to 59.4% from the same period in 2022. It also failed to meet the expectations of analysts, who predicted 56.9%.

Some of the reasons for Levi’s declining gross margin were increased transportation costs and promotions that the company used to clear its inventory.

“We did get rid of inventory to the extent we could — that did hurt margins,” CFO Harmit Singh explained. “Promotional levels were slightly higher than anticipated.”

Levi Strauss & Co. stock (LEVI) dropped 16% to $15.14 per share on Thursday compared to the $18.03 close from the previous day. This is the biggest slide its shares have experienced since the company went public in 2019.

The post Levi Strauss & Co. Shares See a Record Drop Amid Declining Gross Margin appeared first on theprimarymarket.com.