Levi Strauss Reports Q4 Profit Decline Despite Modest Revenue Growth

Denim apparel maker Levi Strauss (LEVI) posted weaker earnings performance in the fourth quarter, signaling challenging market conditions for the iconic brand. The company’s net income slipped to $158.0 million, or $0.40 per share, compared to $182.5 million, or $0.46 per share in the corresponding quarter a year earlier. This represents a notable contraction in bottom-line profitability that underscores intensifying competitive pressures within the apparel sector.

Revenue Performance Remains Subdued

While Levi Strauss managed to achieve marginal revenue expansion, the growth trajectory remains underwhelming. Quarterly revenue rose just 0.9% to $1.765 billion from $1.749 billion previously. The sluggish top-line momentum, combined with compressed earnings, paints a picture of a company navigating headwinds in consumer spending and market demand.

Adjusted Earnings Paint Slightly Better Picture

When adjusted for certain items, Levi Strauss reported earnings of $162.9 million, or $0.41 per share, providing a marginally improved perspective on operational performance. Nevertheless, even these adjusted figures fall short of reversing the overall narrative of profit contraction that characterizes the quarter.

Financial Summary at a Glance

The quarter’s performance tells a cautionary tale for Strauss and its investors:

• Net earnings declined 13.4% year-over-year to $158.0 million
• Earnings per share (EPS) fell 13% to $0.40
• Revenue growth of just 0.9%, the slowest expansion in recent periods
• Adjusted earnings per share stood at $0.41, offering limited upside to the earnings miss

The modest revenue growth coupled with sharply declining profits suggests that Levi Strauss faces mounting challenges in balancing cost pressures with revenue growth, a dynamic that will likely remain under investor scrutiny as the company progresses through the year ahead.