Shares of Levi Strauss (NYSE:LEVI) are nearly 13% lower in after-hours trading, weighed down by a slight miss in FQ3 revenue and bottom-line FY24 sales guidance that came in below expectations. The revenue miss and unchanged guidance both overshadowed better-than-expected profits and a hike in the company’s quarterly dividend.
The iconic apparel manufacturer saw a 17% gain in sales in the Americas but coming in $12M less than expectations. Efforts to expand its direct-to-consumer segment – representing 47% of total sales – resulted in an 8% gain to $672.5M, above $662.35M estimates.
The company earned an adjusted profit of $0.16 per share, an increase from $0.04 in the same quarter last year and 5 cents above expectations. But an 8% increase in total revenue to $1.44B was slightly below the $1.45B estimate. The company’s gross margin expanded 180 basis points to 60.5%.
Despite a heightened interest in denim, the company left its FY24 guidance unchanged. The company is now looking for revenue to increase by 1%-3% to a range of $6.24B to $6.36B, straddling the $6.35B estimates, while adjusted EPS is expected to be between $1.17 to $1.27 versus the consensus estimate of $1.27.
The lackluster results are weighing on shares in the denim/apparel sector with shares of Kontoor Brands (KTB), the parent company of Wrangler and Lee jeans, down 2.5% and Ralph Lauren (RL) shares lower by 3%.