Levi Strauss narrows guidance after Q3 sales fall short of estimates; shares fall

Investing.com -- Levi Strauss on Thursday narrowed its guidance after reporting third-quarter revenue that fell short of analysts estimates amid ongoing U.S.-led weakness in its wholesale business, 

Levi Strauss&Co Class A (NYSE:LEVI) fell more than 3% in afterhours following the news.

Levi reported fiscal Q3 EPS of $0.28 on revenue of $1.51 billion. That topped Wall Street forecasts for EPS of $0.27 and revenue of $1.54B.

Wholesale net revenues fell 8% led by declines in North America and Europe. 

Direct-to-consumer net revenue was up 14%, with Ecommerce increasing 19% for the quarter from a year earlier. 

Total inventories increased 6% in Q3 year-on-year, and the company said it continues to expects to achieve inventory levels below prior year levels by year end.

Looking ahead to fiscal 2023 , the company narrowed its net revenue growth guidance to a range of flat to up 1% year-over-year from a range of 1.5% to 2.5%, while adjusted EPS was maintained at $1.10 to $1.20. 

The company hinted at cost cuts, saying it had commenced a "review its operating model and cost structure that should drive agility and material cost savings beginning in 2024.”