Shares of Levi Strauss (NYSE:LEVI) fell around 2% in premarket trading Friday after the clothing company reported worse-than-anticipated Q4 revenue and missed expectations for full-year guidance.
Notably, Levi reported fourth-quarter earnings per share (EPS) of $0.44, beating the consensus estimates of $0.43. Revenue came in at $1.6 billion, while analysts were looking for $1.66 billion.
The company reported a net income of $126.8 million, equating to 32 cents per share. This is a decrease from the $150.6 million, or 38 cents per share, reported in the same period last year.
Levi noted a 9% reduction in its inventory levels compared to the previous year. Further, there was a marginal 2% decrease in wholesale revenue.
When it comes to business divisions, Beyond Yoga posted a 14% increase in revenue. Conversely, the net revenue for the company's other brands segment declined by 11%.
Looking ahead, Levi forecasts a modest increase in its full-year revenue, projecting growth between 1% and 3%. This figure falls short of the 4.7% growth anticipated by Wall Street analysts.
It expects EPS to be in the range of $1.15 to $1.25, which is below the expected $1.33 per share predicted by analysts.
In their note covering the report, Stifel analysts were not too concerned about Levi’s guidance, given that it's the first one under the incoming CEO Michelle Gass.
“For a new CEO issuing her first guidance, a tone of caution on the macro seems good judgement. Ultimately, the market will be looking for evidence new strategies can drive accelerated growth,” analysts wrote.
“We continue to believe in brand vitality and opportunities for extension. With product reflective of new direction arriving in the marketplace across 2024, the proof will be in consumer response,” they added.
In addition to financial results, Levi also announced it will lay off at least 10% of its global workforce. The move comes as part of the company's restructuring efforts and expectations of weaker sales this year.