Levi Stock Drops 12% on Annual Earnings and Sales Guidance Cuts
Levi Strauss (NYSE: LEVI) stock declined 11.7% on Friday, following the jeanswear and casual clothing retailer's release on the prior afternoon of its report for the fiscal third quarter, which ended on Aug. 28.
A portion of the stock's decline is likely attributable to market dynamics. On Friday, the S&P 500 and Nasdaq indexes were down 2.8% and 3.8%, respectively. Shares of athletic-wear specialist Lululemon Athletica, which are often more resilient than those of others in the apparel category, declined 4% on no news. So it seems likely that the market headwind was responsible for roughly 4% or 5% of Levi stock's decline on Friday.
The rest of Levi stock's decline is attributable to the company's fiscal third-quarter revenue that missed Wall Street's expectation, and also to management's paring back its previously issued full-year revenue and earnings guidance. The latter was probably the bigger issue, as investors typically react very negatively to cuts in annual guidance.
Source Fool.com
