Levi Strauss (NYSE:LEVI) announced that it is exploring strategic alternatives for its Dockers brand, including a potential sale, while also lowering its full-year revenue forecast, which sent its shares down more than 11% intra-day today.
The company said the decision to review the Dockers brand is part of its efforts to address underperformance in certain areas. However, Levi Strauss clarified that there is no set timeline for the review and no guarantee it will lead to a sale or specific outcome.
Since its launch in 1986, Dockers has been known for popularizing khaki and business casual attire, but the brand has struggled recently, posting a 15% decline in revenue year-over-year for the third quarter.
In addition to the brand review, Levi Strauss revised its annual sales forecast, now expecting revenue growth of just 1%, down from a previous projection of 1% to 3%. The company anticipates mid-single-digit revenue growth in the current quarter.
During a post-earnings call, Chief Financial Officer Harmit Singh attributed the reduced guidance to challenges faced by Dockers, as well as weaker-than-expected performance in wholesale markets in China and Mexico.
Despite the hurdles, Singh expressed confidence in the company’s efforts to address these issues, noting that improvements are beginning to take shape as Levi Strauss moves into the fourth quarter.
For the third quarter, Levi Strauss reported adjusted earnings of $0.33 per share on revenue of $1.52 billion, slightly beating Wall Street’s earnings expectation of $0.31 per share but falling short of the $1.55 billion revenue estimate.