Levi's Q4 revenues increase 12 percent, but FY25 forecast concerns investors

Though Levi Strauss fourth quarter net revenues of 1.8 billion dollars, rose 12 percent, the company’s outlook for the upcoming fiscal year has raised investor concerns, leading to about a 7 percent drop in the company’s share value in extended trading.

The company projects a 1 percent to 2 percent decline in revenue and adjusted diluted EPS between 1.20 dollars and 1.25 dollars for the year ending November 30, 2025. This, according to a CNBC report, falls short of LSEG's estimates of 3.7 percent revenue growth and 1.37 dollars adjusted diluted EPS.

Despite the cautious outlook, Michelle Gass, president and CEO of Levi Strauss highlighted the strong fourth quarter and holiday season performance, stating: "We delivered a strong fourth quarter and holiday season, positioning us well as we enter 2025. Our sharpened focus on the core Levi’s brand is working, with broad-based strength across women’s, men’s, DTC and wholesale.”

Levi Strauss posts growth across core markets and channels

In the Americas, the denim maker’s net revenues increased 12 percent and within the Americas, the US grew 6 percent on an organic basis.

The company said, in Europe, net revenues increased 15 percent, reflecting growth across a majority of markets, while Asia increased 9 percent, reflecting growth across channels.

Other brands' net revenues increased 10 percent with Dockers increasing by 9 percent Beyond Yoga registering an increase of 10 percent.

The company’s DTC net revenues increased 19 percent reflecting an 11 percent increase in the US, a 17 percent increase in Europe and an 8 percent increase in Asia.

Net revenues from e-commerce grew 19 percent and wholesale increased 7 percent.

The company’s operating margin was 11.5 percent and adjusted EBIT margin increased 120 basis points to 13.4 percent. Gross margin increased 350 basis points to 61.3 percent.

Adjusted net income for the quarter rose to 202 million dollars, while adjusted diluted earnings per share rose to 50 cents.

In the fourth quarter, the company returned 51 million dollars including dividends representing a dividend of 13 cents per share, up 8 percent from prior year.

Levi Strauss FY24 revenues increase by 3 percent

Levi Strauss net revenues of 6.4 billion dollars were up 3 percent, gross margin was 60 percent; 310 basis points above FY23, operating margin was 4.2 percent; while adjusted EBIT margin rose to 10.2 percent.

Adjusted net income for the year under review increased to 503 million dollars, while adjusted diluted EPS rose to 1.25 dollars.

The company returned 289 million dollars in capital to shareholders, up 45 percent versus prior year, including dividends of 199 million dollars, representing annual dividends of 50 cents per share, up 4 percent from prior year.