The stock of Levi Strauss & Co. (LEVI) is down 12% after the retailer reported mixed financial results, lowered its guidance, and announced plans to sell its Dockers brand.
The San Francisco-based company that’s known for its blue jeans reported earnings per share (EPS) of $0.33 U.S, which beat the $0.31 U.S. expected among analysts.
Revenue in what was Levi’s fiscal third quarter totaled $1.52 billion U.S., which missed the $1.55 billion U.S. that had been forecast on Wall Street. Sales were flat year over year.
In terms of its outlook, Levi Strauss reaffirmed its full-year earnings guidance of $1.17 U.S. to $1.27 U.S. per share, which is in line with analyst expectations of $1.25 U.S.
However, the company lowered its revenue guidance, saying it now expects sales to grow only 1% in the current fiscal year. Previously, management had forecast sales growth of 1% to 3%.
On an earnings call, executives at Levi Strauss blamed the poor results on the Dockers brand, which they plan to sell.
Dockers, which sells khaki pants and dress shirts, saw its sales decline 15% to $73.7 million U.S. in the most recent quarter.
Had it not been for Dockers, Levi Strauss would have reported a better quarter, said management.
The company has hired Bank of America (BAC) to lead the sale of Dockers in coming months and help the company find a buyer for the brand and its stores.
Prior to today (Oct. 3), Levi Strauss’ stock had risen 60% in the last 12 months to trade at $21.06 U.S. per share.
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