(Boursier.com) — Levi Strauss alerted Wall Street last night regarding its annual outlook, with the denim giant lowering its revenue estimates and citing weakness in the wholesale chain. For its third fiscal quarter, ended at the end of August, the group posted adjusted earnings per share of 28 cents, slightly above market expectations, for revenues of 1.51 billion dollars compared to a consensus of 1.54 billion. . Revenues therefore disappointed, with weaknesses in Europe and North America.
For the current quarter, Levi’s says it is taking a more cautious approach in terms of forecasts. For the financial year, adjusted earnings per share are now expected to be at the bottom of the previous guidance range, which ranged from $1.10 to $1.20. The group cites buyers who are increasingly price sensitive, particularly those who are used to buying from Walmart or other Levi’s wholesale partners. For the third quarter just ended, the contrast is striking between direct-to-consumer (DTC) sales, up 14% year-on-year, and the 8% decline observed over the same period for the ‘wholesale’ channel. From a geographical point of view, while the Americas zone declines, Asia progresses by 12% over the quarter ended with China. the group finally says it is accelerating its transition to a more DTC-oriented model (direct sales to consumers). The group is also launching an initiative to re-examine its operating model and cost structure, in order to generate significant savings from 2024.
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