Levi Strauss & Co (NYSE:LEVI) stock fell 7.39% (As on October 3, 11:18:00 AM UTC-4, Source: Google Finance) after the company it forecast tepid holiday quarter revenue as the denim maker grapples with weak demand from retailers with consumers paring back spending. The company was considering a sale of its underperforming khaki and chinos brand Dockers. Dockers’ sales dropped 15% for the third quarter. Levi, which is in the midst of a turnaround strategy, is now looking to focus on its core denim clothing. Levi’s margins have benefited from cost-cutting measures and exiting businesses like its footwear and Denizen brand. The adjusted EBIT margin improved by 250 basis points to 11.6 per cent. As of August 25, 2024, Levi Strauss & Co. reported cash and cash equivalents of $577 million and total liquidity of approximately $1.3 billion. Total inventories also decreased by 7 per cent.

LEVI in the third quarter of FY 24 has reported the adjusted earnings per share of 33 cents, beating the analysts’ estimates for the adjusted earnings per share of 31 cents. The company had reported the adjusted revenue growth of 2 percent to $1.52 billion in the third quarter of FY 24, missing the analysts’ estimates for revenue of $1.55 billion.

Moreover, Direct-to-Consumer (DTC) revenues grew by 10 per cent on a reported basis and by 12 per cent in constant currency, driven by strong growth in the US (12 per cent) and Europe (9 per cent). E-commerce revenues also grew by 16 per cent, contributing to DTC accounting for 44 per cent of total net revenues. However, wholesale revenues declined by 6 per cent on a reported basis and by 5 per cent in constant currency. In terms of regional performance, the Americas saw a 1 per cent decline in net revenues on a reported basis but remained flat in constant currency. Adjusting for the Denizen exit, the Americas recorded a 2 per cent increase. Europe posted a 6 per cent rise in net revenues on a reported basis and 7 per cent in constant currency, with positive growth across most markets and channels. Asia’s net revenues were stable year-on-year in reported terms but up by 4 per cent in constant currency.

Levi Strauss sees fiscal year 2024 adjusted earnings at a mid-point of between $1.17 and $1.27 per share, versus the $1.25 estimate.