Levi Strauss Sets Staff Cuts; Q2 Revenue Trails Forecasts

The coronavirus pandemic shuttered stores, pushing down Levi sales by 60% in the quarter ended May 24.
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Levi Strauss  (LEVI) - Get Report shares fell in after-hours trading Tuesday, after the clothes maker reported weaker-than-expected revenue and announced it’s laying off about 700 workers.

The company suffered from store shutdowns caused by the coronavirus pandemic.

In the fiscal 2020 second quarter ended May 24, the company registered a net loss of $363.5 million, or 91 cents a share, swinging from net income of $28.2 million, or 7 cents a share, in the year-earlier quarter. 

Levi posted an adjusted loss of 48 cents a share, equal to analysts’ forecasts.

Revenue plunged 60% to $497.5 million in the latest quarter from $1.31 billion a year ago. Analysts had estimated sales of $504.4 million for the latest quarter.

Levi is dropping its earnings forecast for the rest of the year. As for the job cuts, it’s trimming about 15% of its non-retail and non-manufacturing workers this year.

"Although trends appear to be improving sequentially, the ultimate health and economic impact of the Covid-19 pandemic remains highly uncertain," Levi said in a statement.

"The company expects that its business and results of operations, including net revenues, earnings and cash flows, will continue to be significantly adversely impacted for at least the balance of 2020, and there remains the possibility of additional Covid-19 related inventory and other charges."

Levi shares fell 62 cents, or 4.5%, to $13.21 in after-hours trading, The stock fell 4.02% during the regular trading session.

Editor's note: This story has been updated to reflect that Levi Strauss met adjusted earnings per share estimates compiled by FactSet.