What Levi Strauss's Q2 performance signals about consumers

Levi Strauss (LEVI) posted its second quarter results, just barely missing Wall Street sales estimates. In response, the company's shares began to sink. Yahoo Finance spoke with CFO Harmit Singh about the company's performance and its plans to cut costs.

Yahoo Finance Anchor Josh Lipton joins Wealth! to break down Levi Strauss's recent performance and what it might indicate about the state of the consumer.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Nicholas Jacobino

Video transcript

Well, denim may be in these days, but Levi Strauss latest earnings report out yesterday shows that the consumer still being somewhat cautious in their discretionary spending.

Our Josh Lipton has more on this and what investors are tracking on Levi's.

That's right, Brad.

So they, they still might like the jeans, they might like the denim but investors clearly not happy with Levi's Strauss earning results.

Today.

The company report A Q two profit that did beat Wall Street's forecast but revenue of one 0.44 billion did just miss expectations of 1.45 billion company reaffirming its full year outlook.

Bottom line.

That was not good enough for investors who remember had piled into this name.

Expectations were running hot into this print.

The stock had surged about 40% this year through Wednesday's close.

The company's CFO was on Yahoo Finance this morning talking with us about the results and expressing optimism about the business as we think about the US as a marketplace.

This is the the third consecutive quarter of the US growing for more analysis.

I caught up this morning with steel's Jim Duffy overall.

He says this report was strong with acceleration in the direct to consumer business.

That's a solid foundation.

He argues that they can build on.

So what is the issue?

Jim says investors are disappointed with the wholesale business and that the company did not in fact raise its full year outlook.

But he's arguing this stock move we're seeing right now is an overreaction.

He rates this one a buy because it is a great band brand.

He says with opportunity for category expansion, good capacity for revenue and margin improvement and a strong balance sheet company also just raised its quarterly dividend for the first time in six quarters more broadly.

What does this report tell us about the consumer?

Jim says it tells us the consumers still willing to spend when they see something they want, but they are spending more selectively right now and you can see that in the company's numbers, Jim says with its direct to consumer numbers were strong but some wholesale still having challenges.

Brad.

Yeah, it's interesting what they said was doing well, successes in their core space dye business.

I I don't know too much about that one, but I do know a little bit more about the wide leg pants that everybody's been kind of pushing on us right now.

It's a trend.

It's a theme.

Have you bought him?

No, because you know, I don't think that's a good look for me.

I got, I I try the wide leg, I just look like a fire hydrant.

You know, it's that I believe you could, Josh.

You think so?

I appreciate that.

That's nice.

All right, we're both gonna give it a shot here.

We'll report back here, Josh.

Thanks so much.