Levi Strauss & Co., a leading denim manufacturer, disclosed a mixed financial performance for its fourth quarter, with an increase in revenues but lower earnings reported. The actual adjusted earnings surpassed the predicted market value, but the revenue did not meet expectations. Additionally, the enterprise expects a growth in profit for the 2024 financial year, albeit less than the market prediction.
The company also unveiled a long-term profitability strategy - Project FUEL. The initial implementation phase is set to occur in the first half of 2024, with an expected workforce reduction of around 10-15%. This move is predicted to incur restructuring charges between $110 to $120 million during the first quarter.
Before-market trading on the New York Stock Exchange saw Levi's shares dropped nearly 2%, equivalent to a trading price of $15.48.
In line with the 2024 strategic plan, the company aims to offset costs by $100 million.
For the fourth financial quarter, the net income was declared at $127 million, a decrease from the prior year's $151 million. The earning per share stood at $0.32, a dip from $0.38 from the previous year.
The adjusted net income was $179 million, which showed an increase from the last year's $137 million. The adjusted earning per share amounted to $0.44, which was a boost from last year's $0.34.
The net revenues reported were $1.64 billion, a surge of three percent from the previous year's $1.59 billion. If we consider a constant currency basis, revenues grew by two percent.
The market had predicted the company's revenues of $1.66 billion and earnings of $0.43 per share, based on Thomson Reuters' compiled figures. These usually exclude exceptional items.
In terms of the company's outlook for financial year 2024, it estimates the adjusted earnings per share to lie between $1.15 and $1.25, marking an increase from the fiscal year 2023's $1.10 per share. Additionally, it expects net revenue growth of one to three percent year-on-year.
The market estimate for the fiscal year 2024 stands at earnings of $1.33 per share.
