Levi Strauss & Co (LEVI) Q4 2023 earnings summary

Executive summary

• Q4 net revenue rose 3% to $1.642B; DTC grew 11%, gross margin expanded 200 bps to 57.8%, and adjusted diluted EPS rose 29% to $0.44.

• FY 2023 revenue was flat at $6.179B, while adjusted diluted EPS was $1.10 versus $1.50 in FY 2022.

Financial highlights

• Q4 GAAP net income was $127M versus $151M; adjusted net income was $179M versus $137M YoY.

• Q4 operating margin was 9.2% versus 8.6%; adjusted EBIT margin rose to 12.2% from 9.0%.

• FY gross margin was 56.9%, down 70 bps; adjusted EBIT margin was 9.0% versus 11.6%.

• FY GAAP net income was $250M versus $569M; adjusted net income was $441M versus $604M.

Outlook and guidance

• FY 2024 reported revenue growth guidance is 1%–3% YoY, including an expected 2-point negative impact from Denizen exit, lower planned off-price sales and FX, partly offset by a 53rd week.

• FY 2024 adjusted diluted EPS guidance is $1.15–$1.25, including $0.05 adverse impact from revenue items and $0.12 from a higher normalized tax rate.

• Guidance assumes no significant worsening in consumer macro pressures, inflation, supply-chain disruptions or currency impacts.