Levi Strauss shares under pressure amid warning on outlook
While Q3 earnings beat expectations, revenue missed forecasts and the company issued a warning for the full-year.
Earnings
Despite third quarter (Q3) earnings at Levi Strauss beating expectations, revenue missed forecasts and the company issued a warning for the full-year (FY). The stock will fall 5% at the open today after having fallen 4% during yesterday’s trade.
Video Transcript
Levi shares fall
Levi Strauss shares fell 5% in extended trade last night after the group cut its full-year profit forecasts. This is on top of the 4% drop during normal hours.
Levi Strauss posted earnings of $0.40 a share for the third quarter, $0.03 higher than consensus. Revenue missed expectations, though, as the denim maker has to deal with softening demand.
The strengthening dollar and persisting supply chain issues, with inflation at decade highs across the globe and a looming recession, consumers are moving away from these higher priced products and clothes generally to essentials such as food and energy.
The strengthening dollar is also affecting Levi Strauss' margins, down 60 basis points compared with this time last year at 56.9%.
The company now expects full-year 2022 adjusted profit of between $1.44 and $1.49 per share compared to prior forecasts of $1.50 to $1.56.
Now you can see during the session yesterday we saw this 4.0% drop. Add to that a 5% drop when we see shares opened today and you're in this area down here challenging the 1500 level.
So, we're watching that stock at the start of the day's trade after the outlook disappointed investors.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
