Levi Strauss & Co (NYSE:LEVI) shares were down around 15% ahead of Thursday, after quarterly earnings disappointed.
Coming in at $1.44 billion, revenue for the second quarter was slightly shy of the consensus Wall Street forecast of $1.45 billion.
It said that revenue growth was marked at 8% (9% at constant currency), and it highlighted a ‘record’ gross margin of 60.5%
The jeans brand reported an $18 million profit for the quarter, versus a $1.6 million loss this time last year, helped by an improving sales mix favouring direct-to-consumer (DTC) channels as well as cost-cutting measures.
DTC accounted for 47% of the company’s net revenue for the quarter.
“Our transformational pivot to operating as a DTC-first company is yielding positive results around the world, giving me great confidence that we will achieve accelerated, profitable growth for the rest of the year and beyond,” chief executive Michelle Gass said in a statement.
Gass added: “We delivered another strong quarter driven by the Levi’s® brand's prominence at the center of culture, a robust pipeline of newness and innovation, and continued momentum in our global direct-to-consumer channel.
“Our amplified focus on women’s and denim lifestyle is delivering outsized growth and driving meaningful market share gains.”
Levi told investors it expects to see full-year revenue growth of 1% to 3%, in line with prior guidance. Full-year earnings per share is predicted between $1.17 and $1.27.
The company lifted its second-quarter dividend to 12 cents per share, equating to $48 million of payouts, and also said it will buy back $17 million worth of stock.
In New York, the stock was down $3.52 or 15.22% trading at $19.60.