Levi’s Cuts Annual Outlook as Inflation Hits Wholesale Business — Retail Bum

Denim maker Levi Strauss has cut its annual sales forecast after missing analysts’ revenue expectations, resulting in a decline in the company’s share value in extended trading.

With weaker consumer demand at big box retail chains and department stores dragging its growth prospects, the company now expects revenue to either remain flat or see up to 1% year-over-year growth, down from its previous projection of 1.5% to 2.5% growth. Meanwhile, it expects its adjusted earnings per share to be lower than its previously projected range of $1.10 to $1.20.

Levi’s had previously also lowered its profit guidance.

For the quarter that ended August 27, the company’s net income came out to $10 million, or approximately 2 cents per share — a significant decline from the $173 million or 43 cents per share the company had reported for the same period last year. Overall, sales were nearly in line with the $1.52 billion revenue reported for the quarter last year.

The slowdown in Levi’s business underpins factors such as high mortgage rates, gas prices, and inflation, which has impacted consumers’ appetite to shop at stores that carry Levi’s products, according to CEO Chip Bergh.