Levi Strauss (LEVI) earnings Q4 2024

Levi Strauss issued dismal guidance for its current fiscal year on Wednesday, as the denim maker grapples with unfavorable currency exchange rates, one fewer selling week and a loss in revenue from its Denizen and footwear businesses. 

The company said it expects sales to decline between 1% and 2%, well behind estimates of 3.7% growth, according to LSEG. 

It also anticipates adjusted earnings per share will be between $1.20 and $1.25, below estimates of $1.37, according to LSEG. 

Shares fell about 6% in extended trading.

CEO Michelle Gass told CNBC the expected drop in revenue in the current fiscal year does not reflect slower demand, but is more due to the currency trends, one fewer fiscal week and the divested businesses.

Levi ended fiscal 2024 on a high note and reported earnings and sales that both topped expectations. 

Here is how the apparel company fared during its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

• Earnings per share: 50 cents adjusted vs. 48 cents expected
• Revenue: $1.84 billion vs. $1.73 billion expected

The company’s reported net income for the three-month period that ended Dec. 1 was $182.6 million, or 46 cents per share, compared with $126.8 million, or 32 cents per share, a year earlier. Excluding one-time expenses related to impairments, restructurings, acquisitions and leases, among other items, Levi reported adjusted net income of $202 million, or 50 cents per share, compared with adjusted profits of $179 million, or 44 cents per share, a year earlier. 

Sales rose to $1.84 billion, up about 12% from $1.64 billion a year earlier. Organic sales, which exclude an extra 53rd week Levi had during the quarter, along with foreign exchange effects and divested businesses, grew 8%. 

Since Gass took the helm of Levi a year ago, she has moved swiftly to cut aspects of the business that weren’t working, grow higher margin sales on its website and stores, boost profitability and bring more female customers to the brand. Under her leadership, Levi inked a high-profile marketing partnership with Beyonce in September after she released a song about the brand on her album “Cowboy Carter” earlier in the year. 

“Of course, we have to acknowledge the Beyonce effect. We are very pleased with the launch of that campaign, which we’re seeing drive demand across the business,” Gass said in an interview with CNBC.

Gass has been working to bring more women to Levi, which traditionally has drawn more men, because women tend to spend more money and shop for new clothes more often. Women’s apparel is now about 36% of Levi’s overall business, up slightly from a year ago, but Gass said it should represent about half over time.

The company has won female shoppers over not only with loose and wide-legged denim fits, but also with a wide range of new tops such as woven shirts and blouses. 

During the quarter, Levi saw strong sales increases across all of its regions, brands and channels. Sales…