Shares of Levi Strauss & Co. experienced a decline in after-hours trading on Thursday following the company's revised full-year outlook. This adjustment comes as U.S. retailers adopt a more cautious approach to restocking their inventory with new clothing.

Lowering Profit Expectations

Executives at Levi Strauss announced that they anticipate the full-year adjusted per-share profit to be at the lower end of their previous forecast range. The initial estimate was between $1.10 and $1.20 a share. The company also expects sales to remain flat to slightly increase by 1%. This revised outlook contrasts with the previously stated expectations of 1.5% to 2.5% gains, provided in July.

Impact on Shares

The market response to these updated projections was notable, with Levi Strauss's shares experiencing a 3.4% decline after the closing bell.

Third-Quarter Performance

During the third quarter, Levi Strauss reported a net income of $9.6 million, equivalent to 2 cents per share. This result is significantly lower than last year's third-quarter net income, which stood at $172.9 million, or 43 cents per share. Overall revenue also experienced a slight decrease, falling from $1.52 billion in the same quarter last year to $1.51 billion this year.

Adjusted Earnings Beat Expectations

Taking into account impairments, goodwill, and other factors, Levi Strauss earned an adjusted 28 cents per share. Analysts had predicted an adjusted earnings per share of 27 cents, based on sales of $1.54 billion.

Market Challenges

CEO Chip Bergh acknowledged the presence of "continued softness in the wholesale channel, primarily in the U.S." This observation underscores the challenges faced by Levi Strauss in its domestic market.

Levi Strauss & Co. must navigate these obstacles and adapt its strategies accordingly in order to maintain its success in the highly competitive retail industry.

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