By Sabela Ojea

Shares of Levi Strauss on Thursday fell after the company cut its revenue growth outlook for the year and swung to a loss in its latest quarter on a hit to wholesale revenue in the U.S.

The San Francisco-based jeans maker's stock fell 5.8% to $13.40 in after-hours trading.

Three months ago, the company backed its guidance for the year ending in November amid a 2% rise in wholesale revenue. However, this positive trend reversed in the latest quarter and Levi Strauss recorded a 22% drop in wholesale revenue.

Just like Nike, Levi Strauss is shifting its strategic focus toward growing its direct-to-consumer business across its operated physical stores and online channel.

"Today, U.S. wholesale represents less than 30% of our total revenues, down from 40% a decade ago," President and Chief Executive Chip Bergh said in a call with analysts. "The macro effects of higher inflation and a slowing U.S. economy has put increased pressure on the price sensitive consumer."

Among the measures Levi Strauss is taking to restore growth to its U.S. wholesale business are discounts to its Red Tab Tier-3 awards program wholesale offerings, the company said.

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

(END) Dow Jones Newswires

July 06, 2023 17:58 ET (21:58 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.
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