Oct 10 - Levi Strauss's shares slipped 7.7% in

premarket trading on Friday after the denim maker's annual

profit forecast failed to meet investor expectations, as

tariff-linked costs outweighed strong demand for wide-leg

denims in Europe and the Americas.

The company, which capitalised on the resurgence of baggy,

loose-fit apparel among Gen Z customers, raised its 2025 sales

and profit forecasts on Thursday.

However, it warned of a 130-basis-point hit to its

fourth-quarter gross margins owing to U.S. President Donald

Trump's shifting tariff policies.

Levi Strauss sources the bulk of its products from South

Asia, including Bangladesh, Cambodia and Pakistan - countries

that face high tariffs under the Trump administration.

Analysts at Barclays see the Q4 guidance as "conservative"

as the company has not seen any change in trends in September,

nor any push-back on price increases so far, both at the

consumer and retail levels.

Trump's trade policies have also pressured the margins of

other retailers such as Ralph Lauren ( RL ), Abercrombie & Fitch ( ANF )

and Coach handbag owner Tapestry.

The company secured about 70% of its holiday inventory early

and slightly raised prices to mitigate tariff impact and prepare

for the holiday quarter, executives said in a post-earnings

call.

Levi expects annual adjusted earnings-per-share in the range

of $1.27-$1.32, above its prior forecast of $1.25-$1.30 per

share. The mid-point is below an estimate of $1.31, according to

data compiled by LSEG.

The forecast assumes U.S. tariffs will remain at 30% for

China and 20% for other countries through the year-end.

Levi's forward price-to-earnings multiple, a common

benchmark for valuing companies, is 16.94, well above

Abercrombie's 7.48 and American Eagle Outfitters' ( AEO ) 11.38,

per data compiled by LSEG.