Aurelia Butler

(Reuters) -Levi Strauss & Co cut its annual forecasts for the second time on Thursday after missing third-quarter sales estimates, reeling from hefty promotions and falling demand at wholesale channels in North America.Gloomy consumer spending has hit retailers like Macy’s (NYSE:M) and Nordstrom (NYSE:JWN) as high prices and borrowing rates squeeze budgets, denting demand for Levi’s (NYSE:LEVI) denims bottoms, tops and cargo pants.Unseasonably warm weather through the late summer and fall also hurt sales, particularly of men’s jeans in wholesale channels where Levi has less control over product displays, according to Chief Financial and Growth Officer Harmit Singh.”In our own stores we have a lot more buy-now, wear-now product — things like shorts, lighter denim, skirts and dresses,” Singh told Reuters on a call.Levi has struggled with declining sales at its overall wholesale business, particularly in North America, which has a higher exposure to the middle-income consumer.”Value-conscious” shoppers earning between $50,000 and $100,000 are particularly under pressure, Singh said. This has impacted Levi’s sales at retail partners such as Walmart (NYSE:WMT) and Target, where prices of its Signature and Denizen lines start just below $30.Net revenue in Levi’s Americas segment decreased 5%, even as its direct-to-customer (DTC) business, which serves a more affluent consumer, rose 12%.”The brand is trying to sell more through DTC but overall will probably face headwinds going into the holiday season,” said Michael Ashley Schulman, a partner at Running Point Capital.Its margins were also hit by price cuts on certain denim bottoms sold to wholesale retailers like Macy’s and Nordstrom in a bid to boost sales among more price-sensitive shoppers.Levi’s adjusted gross margins declined 130 basis points to 55.6% during the third quarter, also hurt by lower full-price selling and higher product costs.Analysts have said Levi might have to increase promotions and cut prices if wholesale channel sales continue to worsen, which could pressure its margins further. Shareholders are skeptical of the company’s prospects ahead of the key holiday season, according to Schulman, even as executives pledge to expand Levi’s denim assortment into skirts, dresses and other womenswear.”It seems that management’s narrative of an expanding casualization trend in workwear and potential European and Asian growth is not resonating with investors,” he said.Levi forecast revenue to be flat to up 1% in fiscal 2023, compared with prior estimate of 1.5% to 2.5% growth.The company said it expects an adjusted profit per share at the low end of its prior estimated range of $1.10 to $1.20. Analysts on average were expecting $1.12.Net revenue declined to $1.51 billion in the quarter ended Aug. 27 from $1.52 billion a year earlier, missing analysts’ estimate of $1.54 billion, according to LSEG data. More

The European Union’s statistics office Eurostat said retail sales in the 20 countries sharing the euro fell 1.2% month-on-month for a 2.1% year-on-year decline in August. Economists polled by Reuters had expected a 0.3% month fall and a 1.2% year-on-year decline.The monthly fall was caused mainly by a sharp drop in mail orders and shopping on the internet which fell 4.5% and a drop in the sale of petrol, down 3.0%.Year-on-year, the sales of fuel was even more pronounced at 7.7% and there was a 3.2% fall in the sales of food drinks and tobacco.Euro zone inflation was 5.3% in August, well above the European Central Bank’s target of 2.0%. (This story has been corrected to say 2.1%, not 21%, in paragraph 2) More

Egypt has been facing an economic crisis with record inflation and a chronic foreign currency shortage, and a borrowing spree over the last eight years has made external debt repayments increasingly onerous. “Moody’s expects the materialization of asset sale proceeds at the central bank to help restore the economy’s foreign currency liquidity buffer,” the credit rating agency said, placing Egypt’s outlook at ‘stable’. The outlook reflects the agency’s expectation that Egypt will have continued access to official financial support from the International Monetary Fund under its $3 billion arrangement.Egypt has imposed import restrictions to remedy the shortage of foreign currency, while at least two national banks have suspended the use of Egyptian pound debit cards outside the country to stop a drain on foreign currency. The country, which is preparing for elections in December, devalued its currency by more than half in the year to March. More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.The curtain comes down on the first week of the quarter on Friday, an explosive week across all markets that still has one major firework left and which will go a long way to determining investor sentiment in the weeks ahead: the U.S. payrolls report.Asian markets will have closed by the time the September employment report is released at 8:30 ET on Friday, but investors will have plenty data and events closer to home to offer direction before they react to payrolls next week.A batch of data from Japan includes household spending and consumption figures, leading indicators, and the latest foreign exchange reserves. The FX reserves will be monitored more closely than usual. Although the figures are for September, they come days after the yen’s slide below 150.00 yen per dollar sparked a sudden surge that many suspected was intervention from Japanese authorities.But Bank of Japan money market data indicates that the yen’s jump on Tuesday was not the product of yen-buying intervention. The yen is on course for a weekly rise of around 0.5% – not much, but it would mark its best week since July.The big policy event in Asia will be the Reserve Bank of India’s interest rate decision, and more importantly, its guidance.The central bank is widely expected to keep key rates on hold at 6.50%, but any further liquidity withdrawal measures alone may push market yields higher, causing another increase in effective rates.The rupee goes into the meeting trading at 83.00 per dollar, right down at August’s record low 83.45 per dollar. The U.S. dollar eased on Thursday but if it holds its ground on Friday, at a minimum, it will chalk up its 12th weekly rise in a row. That would be a record winning streak, according to Reuters data.On the subject of historic runs, the U.S. two-year/10-year yield curve steepened for a ninth straight day on Thursday, something not seen since at least 2012. The rise in long-dated yields has been the biggest driver of volatility and stress that have been behind the recent selloff in stocks.But one source of relief this week has been oil prices. Crude fell another 2% on Thursday, following Wednesday’s 5.5% slump – the biggest fall in a year.All else equal, lower energy prices cools inflationary pressures and lessens central banks’ need to tighten policy. The prospect of easier policy than previously anticipated should in turn boost investor sentiment and risk appetite. After threatening to test $100 a barrel last month, oil has slumped almost 15% peak-to-trough in the last five days, and its year-on-year price is once again negative. That is, from a policy point of view, disinflationary.Here are key developments that could provide more direction to markets on Friday:- India interest rate decision- Japan household spending (August)- U.S. non-farm payrolls (September) (By Jamie McGeever) More

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