Levi Strauss financial forecast

Clothing giant Levi Strauss has revised its financial forecast downwards for the second time this year, causing a potential decrease in its stock value on Wall Street. The company’s net revenue dropped to $1.51 billion, slightly lower than the expected $1.54 billion. In addition, Levi’s North America division, which serves middle-income customers, saw a 5% decline in revenue due to increased borrowing costs and high prices. However, its direct-to-customer business grew by 12%.

Levi Strauss profit margin decline

As a result, the share price is expected to open at $13.21, with a projected decline of 1.6%. Industry analysts believe that the support level at $12.80 may prevent further drops in value. Levi Strauss faced profit margin declines because it had to reduce prices on specific denim products sold to wholesale retailers. Additionally, the company has been grappling with rising costs of materials like cotton.

Levi Strauss stock

When we look at the long-term trend, Levi’s stock has failed to reach its initial public offering (IPO) price of $17 per share in March 2019. If the current support level breaks, the share price could drop to levels not seen since September 2020.

Levi Strauss is not alone in facing challenges within the clothing industry. Its focus on middle-income consumers, along with the impact of rising prices and borrowing costs, has negatively impacted its performance. It is important to note that other companies in this industry are also dealing with similar issues, emphasizing the wider predicament faced by businesses operating in the same space.