Levi Strauss slashes guidance as wholesale revenue drops

Levi Strauss connected Thursday drastically chopped its nett outlook for the twelvemonth aft the apparel retailer reported a steep driblet disconnected successful wholesale revenues and brushed income successful the U.S., its largest market. 

The bluish jean seller saw agleam spots, however, successful its direct-to-consumer income and China market.

Here's however the institution did successful its fiscal 2nd 4th compared with what Wall Street was anticipating, based connected a survey of analysts by Refinitiv:

The company's reported nett nonaccomplishment for the three-month play that ended May 28 was $1.6 million, oregon 0 cents per share, compared with a nett income $49.7 million, oregon 12 cents a share, a twelvemonth earlier. During the quarter, Levi reported adjusted net of 4 cents per share.

Sales dropped to $1.34 billion, down 9% from $1.47 cardinal a twelvemonth earlier. 

Halfway done its fiscal year, Levi slashed its afloat twelvemonth nett outlook. It present expects adjusted net per stock of $1.10 to $1.20, compared to a erstwhile scope of $1.30 to $1.40.

Levi besides tightened its gross outlook for the year. The retailer present expects income to turn betwixt 1.5% to 2.5% compared to a anterior scope of 1.5% to 3%.

The dismal outlook was attributed to a fig of factors but was driven by an expected slowdown successful U.S. wholesale revenues, which plunged 22% successful the quarter, Levi's main fiscal and maturation serviceman Harmit Singh told CNBC.

The institution is besides readying connected taking terms reductions connected astir a fractional twelve of its much terms delicate items, specified arsenic its 502 jeans, and readying for a higher taxation rate. Levi's effectual taxation complaint during the 4th was 78.4%, compared to 36.1% successful the year-ago period.

"Our outlook connected U.S. wholesale, adjacent with the pricing moves that we're taking and everything else, we're being cautious astir it," CEO Chip Bergh told CNBC during an interview. "Just successful airy of the caller performance, and the existent macro headwinds, and conscionable the user dynamics successful this market."