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The San Francisco-based company, which is known for the popular Levi’s brand of denim jeans, said its third-quarter revenues edged up 1% annually to $1.52 billion. Market watchers had predicted stronger growth. A double-digit fall in the European market was offset by higher sales in the other regions.
At 56.9%, the third-quarter adjusted gross margin was down 60 basis points from the same period in 2021, which also fell short of expectations. Meanwhile, the management lowered its full-year adjusted earnings guidance to the range of $1.44 per share to $1.49 per share, citing elevated inflation and unfavorable exchange rates. However, Levi’s executives exuded confidence that the company is well-positioned to deliver on its long-term goals.
Levi Strauss & Co. Q3 2022 Earnings Call Transcript
“While we expect the macroeconomic backdrop to remain unpredictable over the next few quarters, our strong brands, diversified business model and proven team position us to deliver on our long-term objectives. We have separated ourselves from the competition by making the right moves in challenging times, and this environment is no different. We will operate with discipline and lean into our strengths to further expand our lead for the years to come,” said Chip Bergh, chief executive officer of Levi Strauss.
Shares of Levi Strauss traded sharply lower early Friday, after closing the previous session lower. The stock has lost about 43% in the past twelve months.