Levi Strauss’ (LEVI) third-quarter earnings narrowly beat Wall Street forecasts, but the company’s stock is down 3% after the well-known maker of blue jeans lowered its forward guidance.
Levi’s reported earnings per share of $0.28 U.S., which was slightly above consensus forecasts of $0.27 U.S. a share.
Revenue in Q3 came in at $1.51 billion U.S., which was slightly below expectations for $1.54 billion U.S., according to data from FactSet.
The company’s gross margins declined 1.3 percentage points to 55.6% in Q3, driven by higher production costs and ongoing discounts offered by the retailer.
The stock fell after the company lowered its revenue growth forecast for the remainder of this year.
Levi’s said it now expects revenue to either be flat or to grow by 1%, which is below previous forecasts for growth of 1.5% to 2.5%, and less than Wall Street expectations of 1.5% growth.
This marks the second consecutive quarter in which Levi’s has lowered its forecast, citing a challenging consumer environment.
Levi’s is pivoting away from its traditional wholesale-focused sales strategy in favor of a direct-to-consumer model that’s being adopted by other retailers such as Nike (NKE).
Levi’s stock has declined 15% this year to $13.21 U.S. per share.
