Business
Levi Strauss expects sales decline despite strong quarterly figures
Levi Strauss forecasts a revenue decline for 2025 despite strong quarterly figures – the stock reacts with losses.
Levi Strauss predicts a revenue decline of 1% to 2% for the current year, despite the company recording double-digit growth in the fourth quarter.
The stock fell 7% to $16.83 after hours. Prior to the announcement of the figures, the price had increased by 9% over the past twelve months.
Despite the positive development in the wholesale business, Levi only expects stagnation in this area. "We want to expand the wholesale business. The past quarter was promising, but we do not plan for negative sales figures as in previous years," said CFO Harmit Singh.
In the fourth quarter of the fiscal year ended December 1, Levi Strauss generated a net profit of 183 million US dollars (46 cents per share), compared to 127 million US dollars (32 cents per share) in the same period last year. The adjusted earnings per share were 50 cents, exceeding analysts' expectations of 48 cents.
Revenue rose by 12% to $1.84 billion, exceeding market expectations of $1.72 billion. In the Americas region, revenue increased by 12%, with the US business recording organic growth of 6%. In Europe and Asia, revenues rose by 15% and 9%, respectively.
The wholesale business, Levi's main revenue driver, grew by 6.7% to $1.01 billion, while the direct-to-consumer segment increased by 19%.
Under the leadership of CEO Michelle Gass, Levi continues to focus on transforming the business model to expand direct sales and reduce dependence on wholesale. The company is currently exploring strategic options for the low-profit fashion brand Dockers, whose sales heavily depend on department stores like Macy’s.
We are in the middle of the sales process for Dockers. It is going well, and we are confident that we can complete the sale by 2025," said Singh.
Falling raw material costs and moderate inflation favor business development according to Singh. Moreover, US tariff policy has only a limited impact on the company's cost structure: "Only 5% of our goods are manufactured in Mexico and less than 1% in China. However, should there be broader tariff increases, we will react proactively.
