By Levi Strauss will lay off at least 10% of its global corporate workforce as part of a restructuring, the apparel retailer said Thursday as it said it expected weaker sales this year.
The job cuts will take place in the first half of the year, and could affect up to 15% of corporate employees, Levi’s said. The company had more than 19,000 employees as of November, but it is unclear how much of that workforce is in corporate offices.
The cuts, which the company said will lead to $110 to $120 million in restructuring charges in the first quarter, come amid a wave of early year layoffs within the retail industry and across a range of public companies. Macy’s and Wayfair both announced job cuts this month, as both older and newer retailers try to kick-start sales and boost profits.
The company made the announcement as it reported fiscal fourth-quarter earnings and forecast a weaker-than-expected fiscal year ahead. The cost-cutting push comes as Levi’s President Michelle Gass is expected to succeed Levi’s CEO Chip Bergh on Monday.
Here’s what Levi’s reported compared with what Wall Street expected, according to analyst estimates compiled by LSEG, formerly known as Refinitiv:
The company said it expected revenue to rise 1% to 3% for the full fiscal year, lower than the 4.7% Wall Street anticipated. Levi’s projects earnings of $1.15 to $1.25 per share for the year, lower than analyst expectations of $1.33 per share.
Net income for the three-month period that ended Nov. 26 was $126.8 million, or 32 cents per share, compared with $150.6 million, or 38 cents per share, a year earlier. Revenue rose 3% to $1.64 billion.
The company’s shares rose about 4% in trading Friday.
Inventories during the quarter declined 9% from the prior year. Wholesale revenue saw a slight 2% drop.
In the company’s specific segments, Beyond Yoga revenue rose 14%. The denim retailer has looked to gain athleisure market share, and appointed former Athleta CEO Nancy Green as the new chief executive of the brand earlier this month.
The company’s other brands segment saw net revenue fall 11%.
Separately, Levi’s reportedly renewed its naming rights deal for the San Francisco 49ers stadium for 10 years and $170 million.
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