Levis Strauss Reports Dismal Q2 Earnings

Shares of denim maker Levis Strauss hit $21.86 in after-hours trading on Tuesday after the company reported second quarter earnings.

For the quarter, adjusted diluted earnings slipped 21% from the prior year to 17 cents. When adding $29 million of expenses associated with its IPO, second-quarter profit was 7 cents a share. This is compared to $74.9 million or $0.19 per share a year earlier. Revenues were $1.3 billion during the three-month period, up 5% from the year-ago period and were in line with expectations.

The company’s CEO Chip Bergh remarked after the earnings release, “I’m not going to worry about the one-time cost of the IPO. That’s a one-time short-term hit. We’re in it for the long-term.”

“Our second quarter and first half results reflect the continued strength of our diversified business model as we delivered broad-based growth across all brands, regions and key product categories despite a challenging retail and macroeconomic environment,” said Bergh on the earnings call.

“For both periods, the Levi’s brand grew in all three regions across men’s, women’s, tops and bottoms and maintained its position at the center of culture through iconic products and consumer experiences.”

Levis Strauss has said it expects net revenues to grow at the high end of the mid-single digit range in fiscal 2019 with adjusted EBIT margin is expected to be slightly up in the range of 10 basis points. The estimate for capital expenditures is between $190 million and $200 million.

The company, which is one of the world’s largest brand-name apparel companies, also revealed that it plans to open around 100 new company-operated stores by the end of the year. Additionally, Levis Strauss anticipates capital expenditures of approximately $190 – $200 million

Disclaimer: We have no position in Levi Strauss & Co. (NYSE: LEVI) have not been compensated for this article.