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Levi Strauss will lay off at least 10% of its international corporate workforce as part of a restructuring. The clothing retailer said Thursday that it predicted weaker sales this year.
Corporate Restructuring: Levi’s to Cut Jobs Amid Challenging Forecast
Levi Strauss & Co. has revealed plans to cut jobs in the first half of the year, potentially affecting up to 15% of corporate employees.
The decision comes amidst a broader trend of early-year layoffs in the retail industry, with other companies like Macy’s and Wayfair also announcing job cuts in recent weeks.
Workforce Impact: Up to 15% of Corporate Employees Affected
The job cuts are expected to impact corporate employees, and the exact number will be determined in the coming months. Levi’s, which had over 19,000 employees as of November, aims to streamline its operations and improve efficiency.
However, the proportion of the workforce in corporate offices remains unclear.
Financial Performance and Forecast: Mixed Results
Levi’s announced its fourth-quarter earnings alongside the job cut announcement. The company reported adjusted earnings per share of 44 cents, slightly exceeding the Wall Street estimate of 43 cents. However, revenue fell short, with $1.64 billion compared to the expected $1.66 billion.
Weaker Fiscal Year Outlook: Below Analyst Expectations
Levi’s provided a weaker-than-expected forecast for the fiscal year ahead, anticipating a revenue increase of 1% to 3%, lower than the 4.7% anticipated by Wall Street. The projected earnings per share for the year, $1.15 to $1.25, also fell below analyst expectations of $1.33 per share.
Financial Snapshot: Q4 Net Income and Segment Performance
For the three months ending Nov. 26, Levi’s reported a net income of $126.8 million, or 32 cents per share, compared to $150.6 million, or 38 cents per share, in the same period a year earlier. The company’s shares experienced a 2% decline in extended trading following the announcement.
Segment Performance: Beyond Yoga Growth, Other Brands Decline
Levi’s highlighted growth in its Beyond Yoga segment, with a 14% rise in revenue.
The company has been focusing on gaining market share in the athleisure category. Conversely, the Other Brands segment saw an 11% decline in net revenue.
The decision to cut jobs and the cautious fiscal outlook reflect the ongoing challenges faced by retailers, compounded by industry-wide shifts and changing consumer preferences.**
