Levi Strauss & Co.’s shares fell more than 6% on Tuesday after investors saw that the company’s earnings per share fell below expectations.
The jeans company achieved $0.07 earnings per share, but Levi’s had expected $0.12 per share. However, Levi’s exceeded expectations for revenue earning during the second quarter bringing in $1.3 billion, a $ 0.01 billion increase above expectations.
High costs associated with the company’s initial public offering are being attributed as the reason for the missed earnings expectations. There will be a new focus on developing particular clothing such as footwear and outerwear.
"The Levi's brand grew in all three regions across men's, women's, tops and bottoms and maintained its position at the center of culture through iconic products and consumer experiences," said Chip Bergh, the CEO of Levi's.
Despite underperforming, Levi’s increased its revenue globally. The company increased revenue 3% in the Americas, 9% in Europe and 6% in Asia. Increases in revenue were also attributed to adding 78 store locations and expanding its e-commerce operations.
Levi’s low earnings per share have caused anxiety in investors as to whether the brand is as strong as it used to be, resulting in a drop in the shares’ value.