2023-04-06 08:05:25 ET
Levi Strauss ( NYSE: LEVI ) stock slumped in premarket trading after posting an earnings beat, but advising caution on consumer spending ahead.
Shares of the San Francisco-based apparel manufacturer reported $0.34 in earnings per share on $1.69B in sales against the expectation of $0.33 in earnings per share and $1.61B in revenue. For the first quarter, the company notched 12% growth in Direct-to-Consumer sales, but noted a 360 basis point contraction in gross margins year over year.
“Our first quarter results reflect the strength of our brands and the progress we are making against our strategic priorities,” CEO Chip Bergh said. “We delivered strong growth in our international business and record-breaking revenue performance in our direct-to-consumer channel.”
Total inventories remained stubbornly high, rising 33% on a dollar basis over the prior year. That said, the trend represented a 25 basis point improvement sequentially.
“Our teams also made significant progress reducing inventory levels, putting us in a stronger position as we move through the balance of the year,” CFO Harmit Singh said. “We are reaffirming our annual revenue and EPS guidance reflecting a cautious outlook on the macro-environment though we remain excited about the momentum in our DTC and international business.”
Management expects net revenues between $6.3B and $6.4B and adjusted diluted EPS of between $1.30 to $1.40 for the full year. Analysts had anticipated $1.33 in earnings per share and $6.31B in sales.
Shares of Levi Strauss ( LEVI ) slipped about 4% shortly after reporting the results .
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Levi Strauss stock slides on cautious outlook