Raphael Stevens

Levi Strauss delivered mixed quarterly results and said it was looking to sell its Dockers business.
The denim maker is seeing strong gains in its namesake brand and Beyond Yoga but sales at Dockers plunged 15% during the quarter.
Levi’s focus on direct selling, plus lower cotton costs, led its gross margin to grow by 4.4 percentage points.

Justin Sullivan | Getty Images

Denim-crazed consumers are turning to Levi Strauss & Co for new jeans, but the company’s overall business is being dragged down by its Dockers brand, which the company is now considering selling off, it announced Wednesday. 
Sales at Levi’s brand were up 5% during its fiscal third quarter — the biggest gain in two years — but overall revenue came in flat and lower than Wall Street had expected. 

Shares of Levi’s fell more than 8% in extended trading Wednesday.
Here’s how the denim-maker performed compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Earnings per share: 33 cents adjusted vs. 31 cents expected 
Revenue: $1.52 billion vs. $1.55 billion expected

The company’s reported net income for the three-month period that ended Aug. 25 was $20.7 million, or 5 cents per share, compared with $9.6 million, or 2 cents per share, a year earlier. Excluding one-time items, Levi’s posted earnings of $132 million, or 33 cents per share. 
Sales came in at $1.52 billion, up slightly from $1.51 billion a year earlier. 
With one quarter left to go in the fiscal year, Levi reaffirmed its full-year adjusted earnings per share guidance of $1.17 to $1.27, in line with expectations of $1.25, according to LSEG. It expects earnings per share to come in at the midpoint of that range.

It trimmed its revenue guidance and is now expecting sales to grow 1%, compared to a previous range of between 1% and 3%. That’s below the 2.3% growth that analysts had expected, according to LSEG.

So long, Dockers

Levi’s, which owns its namesake brand, as well as Dockers and Beyond Yoga, would have printed quite a different set of results had it not been for Dockers. It started that brand in 1986 to offer consumers an alternative to denim: khakis. 
Throughout the 1990s and 2000s, khakis were a mainstay in most consumers’ closets but these days, it has fallen out of fashion. The efforts that Levi’s has made to differentiate Dockers led to too much overlap with the Levi’s brand, which has expanded into a lifestyle brand that offers a lot more products than jeans.
During the quarter, sales at Dockers were down 15% to $73.7 million while Beyond Yoga, the buzzy athleisure brand it acquired in 2021, saw sales grow 19% to $32.2 million. 
“Over the last couple of years, the brand has underperformed. … We felt this was the right decision for the long term. Our view financially is the exit of Dockers will improve the company’s overall margins and also minimize volatility in top line growth,” Levi’s finance chief Harmit Singh told CNBC in an interview. “We believe the exit of Dockers will allow both Dockers and Levi’s to independently operate and maximize each other’s value independently.” 
Levi’s has tapped Bank of America to lead the sale process. 

Direct gains

Beyond Docker’s, Levi’s is making gains in growing its profitability as it continues to shift its focus to selling directly to consumers.
During the quarter, its gross margin rose by 4.4 percentage points, which Singh attributed to the direct-selling strategy, lower cotton costs and better products that didn’t need to be marked down to be sold. 
Like other brands, Levi’s has been working to carve out its direct selling strategy and reach more customers through its own stores and websites rather than through wholesalers like Macy’s. The strategy is a boon to profits because the margins are higher and it also allows brands to get closer to their customers through data collection.
During the quarter, Levi’s direct channel was up about 10%, driven by strength in the U.S. and 16% growth in e-commerce. Overall, direct sales comprised 44% of total revenue and Levi’s wants to get that number closer to 55%.
Behind those numbers are a slew of splashy marketing campaigns, which include a new partnership the jeans brand announced with Beyoncé on Monday after the pop star released a song titled “LEVII’S JEANS” earlier this year on her country album.
“Our strategic decision was to actually have Beyoncé represent some of our core product. So in the first ad, chapter one, she’s in … 501s and an essential white t-shirt and it doesn’t get more Levi’s than that,” CEO Michelle Gass told CNBC. “Part of the success recipe for Levi’s has been and will continue to be us living in the center of culture and bringing together the icon of Beyoncé with the icon of Levi’s, I don’t think there’s any better example of that.”

Global woes

Sales in Levi’s Europe business came in higher than expected at $406.6 million, ahead of StreetAccount estimates of $392 million, but sales in the Americas and Asia came in lower. Levi’s posted $757.2 million in sales in the Americas, below the the $789.2 million that StreetAccount analysts had expected. In Asia, Levi’s saw revenue of $247.1 million, below StreetAccount estimates of $258 million. 
“China was a drag,” Singh said of the region, which represents about 2% of Levi’s overall business. “It’s got this macro headwinds, and we had some execution issues. We’ve just changed the leadership in China and over time we still believe in the long-term potential of China.”
In the Americas, beyond a slowdown at Docker’s, sales were also impacted by one of Levi’s largest wholesale customers in Mexico, Singh said. During the quarter, the partner had a cybersecurity breach, which constrained shipping times and impacted sales. The region is also working through some “execution issues,” said Singh. More

Costco launched platinum bars on its website for $1,089.99, an addition to the company’s precious metals selection of gold bars and silver coins.
Gold bars launched at Costco in August 2023, and not even two months later were selling out within hours of a restock.
While the value of gold has risen consistently in the last five years, platinum has not held up as well. The value of platinum has risen more than 15% over the past 12 months, though it has dropped over 8% since May.

Arrows pointing outwards

Source: Costco

Costco continues to chip away at the gold mine that is the precious metals market. The wholesaler is adding Swiss-made platinum bars to its selection.
Costco on Wednesday announced the 1-ounce platinum bars, on sale for $1,089.99 on its website alongside its now-famed gold bars and silver coins. The bars are only sold online, and cannot be delivered to Louisiana, Nevada or Puerto Rico, the company said. Interested buyers will also need a Costco membership, which costs between $65 and $130 a year.

It’s no surprise the company has continued to delve into the precious metals market. Gold bars launched at Costco in August 2023, and not even two months later were selling out within hours of a restock. Analysts at Wells Fargo reported in April that Costco was selling as much as $200 million worth of gold bars a month.
“I’ve gotten a couple of calls that people have seen online that we’ve been selling 1-ounce gold bars,” said Richard Galanti, then-chief financial officer of Costco, on the company’s earnings call in September 2023. “When we load them on the site, they’re typically gone within a few hours, and we limit two per member.”
The value of gold has risen more than 40% in the past year and over 70% in the last five years. But the price of platinum has been a little more rocky in recent years. The value of platinum has risen more than 15% over the past 12 months, though it has dropped more than 8% since topping $1,100 earlier in 2024.
— CNBC’s Jeff Cox contributed to this report.

Don’t miss these insights from CNBC PRO More

Diamond Sports currently plans to drop all of its Major League Baseball teams from its Bally Sports regional networks, with the exception of the Atlanta Braves.
Bally Sports networks have been dropping teams during its ongoing bankruptcy process. Last year the San Diego Padres and Arizona Diamondbacks exited their regional sports networks.
An attorney for Diamond Sports said it’s still in negotiations with the individual clubs in hopes of maintaining the rights of MLB teams for its networks.

A microphone with the Bally logo is used for a post game interview following the Atlanta Braves 3-0 victory over the Minnesota Twins at Truist Park on June 28, 2023 in Atlanta, Georgia. 
Todd Kirkland | Getty Images

Major League Baseball is out of here.
Diamond Sports — the owner of Bally Sports-branded regional sports networks — said Wednesday that it plans to drop all MLB teams from its channels except for the Atlanta Braves.

Bally Sports has more than a dozen networks across the U.S. Diamond has reached out to all of the 11 teams on its air — the Cincinnati Reds, Cleveland Guardians, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers, Minnesota Twins, St. Louis Cardinals, Tampa Bay Rays and Texas Rangers — with amended, proposed contracts, to determine the future of MLB on the networks.
A Diamond attorney made the comments before a U.S. bankruptcy judge on Wednesday as part of an update on the company’s ongoing bankruptcy process and attempt at finalizing a reorganization plan.
Some of those teams were already slated to see their contracts end this season, and some contracts are not being determined by the bankruptcy process, a Diamond spokesperson said.
MLB’s regular season ended earlier this week, and the postseason has already begun. Regional sports networks primarily air regular-season games.
“To be clear, rejecting these teams is not our preferred path,” Diamond attorney Andrew Goldman said on Wednesday. “Our preferred plan is to bring as many teams into the reorganized [company’s] fold as possible.”

He added the company is still in negotiations with the individual clubs, but its discussions with MLB’s Commissioner’s Office have ended.
MLB’s attorney James Bromley on Wednesday told the bankruptcy judge it was “unfortunate we are being sandbagged this way,” and added that “some of our clubs are being left out in the cold again.” A spokesperson for MLB declined to comment.
Goldman said Diamond had warned the league about this outcome in August, noting it was a possibility if the MLB rejected Diamond’s latest proposal.

Curveball

Milwaukee Brewers’ Sal Frelick hits a double during the fourth inning of Game 2 of a National League wild card baseball game against the New York Mets Tuesday, Oct. 1, 2024, in Milwaukee.
Morry Gash | AP

For decades, the regional sports networks were a lucrative business model for the teams and leagues, and networks paid high fees to air games. But they have suffered as cord-cutting has hit the pay-TV business, leading to fewer subscribers.
This — and the heavy debt load Diamond has contended with since Sinclair acquired the business from Disney in 2019 — led the owner of the largest portfolio of regional sports networks to file for bankruptcy in March 2023.
Diamond’s lawyers have been trying to reset those rights payments to reflect so-called market rates. As a result, Diamond has rejected contracts, seeing a number of teams find new TV and streaming homes.
In June, the NBA and NHL voiced concerns about the viability of Diamond’s business, particularly ahead of the seasons that will begin this month.
A Diamond attorney said Wednesday was a “watershed moment” for the company as it was able to file an amended reorganization plan. While Diamond aims to exit bankruptcy protection, the possibility of winding down the business still exists. Still, attorneys said the company promised the NBA and NHL they would honor their contracts through the end of the season.
“Today marks an important step forward for Diamond with the filing of a baseline plan to enable us to emerge from bankruptcy as a viable, go-forward business before year-end,” a Diamond spokesperson said in a statement. “We have delivered proposals to and remain in discussions with our MLB team partners around go-forward plans. We firmly believe that through our linear and digital offerings we have created the best economic and fan-friendly engine for all of our team partners.”
Diamond’s tussles with MLB began before the filing.
Diamond had been pushing unsuccessfully for some time to hold the streaming rights for all MLB teams that air on its networks.
Last year, the San Diego Padres and Arizona Diamondbacks left their Bally Sports networks, and the league began producing and distributing the games on pay-TV bundles and MLB TV instead. More

Ford Motor lost its lead in electric vehicle sales to crosstown rival General Motors during the third quarter, as the automaker’s EV sales growth slowed.
Ford on Wednesday reported a 0.7% increase in third-quarter U.S. new vehicle sales, including a 12.2% increase in EVs compared to a year earlier.

A banner advertises the Ford Mustang Mach-E electric vehicle at a Ford dealership on August 21, 2024 in Glendale, California. 
Mario Tama | Getty Images

DETROIT – Ford Motor lost its lead in electric vehicle sales to crosstown rival General Motors during the third quarter, as the automaker’s EV growth slowed.
Ford on Wednesday reported a 0.7% increase in third-quarter U.S. new vehicle sales, including a 12.2% rise in EVs compared with a year earlier.

The third-quarter results for Ford contributed to a 45% increase in EV sales this year through September to 67,689 units. That compares with GM on Tuesday reporting EV sales of 70,450 units through September, including a roughly 60% year-over-year rise during the third quarter.
Both Ford and GM continue to trail Hyundai Motor, including Kia, in EVs by roughly 18,000 units or more. The South Korean automaker remains a distant second in U.S. EV sales to market leader Tesla.
GM has been significantly increasing its number of EV models, including by offering eight “Ultium-based” EVs for consumers — referring to its electric vehicle architecture and battery technologies. Ford, on the other hand, only has three EVs and is focusing more on expanding hybrid models in the short term.

Stock chart icon

Ford, GM and Tesla stocks in 2024

“Different lifestyles and use cases require unique types of power,” Andrew Frick, president of Ford Blue and customer service, said in a release. “We’ve listened to customers to offer them vehicles with powertrains to meet their specific needs, and their response validates our product strategy.”
While Ford has de-emphasized its near-term EV plans, company executives such as CEO Jim Farley have touted the brand’s ranking in sales.

The Ford brand maintains its No. 2 sales position behind Tesla, according to the Detroit automaker.
Regarding Ford’s overall third-quarter sales, the company is expected to have outpaced the industry. Auto industry forecasters such as Cox Automotive and Edmunds project third-quarter sales industrywide will be down roughly 2% compared with a year earlier.
Ford was led by gains in its EVs and hybrid models, which combined to account for 14% of its sales during the third quarter. Traditional vehicles for the automaker were down by 2.8% year over year.
Ford’s U.S. sales this year through the third quarter were up 2.7% compared with a year earlier to more than 1.5 million vehicles sold.

Don’t miss these insights from CNBC PRO More

Liberty Media-owned Formula One and luxury giant LVMH are entering into a 10-year partnership, according to a joint press release from Wednesday afternoon. 
The partnership will officially launch at the start of next F1 season and will include “hospitality, bespoke activations, limited editions and outstanding content.”
LVMH owns brands such as Louis Vuitton, Moet Hennessy and TAG Heuer.

The Race winner trophy is seen in a Louis Vuitton trunk on the grid prior to the F1 Grand Prix of Monaco at Circuit de Monaco on May 26, 2024 in Monte-Carlo, Monaco. 
Bryn Lennon | Formula 1 | Getty Images

Liberty Media-owned Formula One and luxury giant LVMH are entering into a 10-year partnership, according to a joint press release from the companies Wednesday afternoon. 
The partnership will officially launch at the start of next F1 season and will include “hospitality, bespoke activations, limited editions and outstanding content.”

The official arrangement will not be the first time that LVMH and F1 have worked together. F1 worked with one of LVMH’s brands during last year’s Las Vegas Grand Prix and the team-up was a success, according to Liberty Media president and CEO Greg Maffei. 
“The opportunity to scale our commercial arrangements is emblematic of the vision we have for Formula 1 as the business continues to grow its platform,” Maffei said in the release. “We look forward to working with Bernard and Frédéric Arnault in the years to come.”

The Race winner trophy is seen in a Louis Vuitton trunk on the podium following the F1 Grand Prix of Monaco at Circuit de Monaco on May 26, 2024 in Monte-Carlo, Monaco. 
Clive Rose | Getty Images

LVMH owns brands such as Louis Vuitton, Moet Hennessy and TAG Heuer, which will be included in the partnership.
“Both in our workshops and on circuits around the world, it is this incessant search to break boundaries that inspires our vision, and this is the meaning that we want to bring to this great and unique partnership between Formula 1 and our Group,” LVMH Group chairman and CEO Bernard Arnault said in the release.
More details of the partnership are set to come in 2025 and there were no financial details included in the release. 

Liberty Media purchased F1 in 2017 and has turbocharged the league’s growth in recent years.
Netflix released a behind-the-scenes series “Formula 1: Drive to Survive” in 2019 that helped push F1 from a niche sport to a more mainstream audience as viewers became fans after getting to see the personalities of individual drivers. The sport has also gotten a tailwind from social media and content creators, giving people more ways to become fans.
The next Grand Prix is Oct. 20 in Austin, Texas. More

Stellantis reported U.S. sales Tuesday of 305,294 from July through September, a 19.8% decline from the third quarter of 2023.
The automaker was expected to be the worst sales performer of major automakers during the third quarter.
Stellantis’ disappointing sales are the latest problem this week for the carmaker, which cut its 2024 profit margin forecast.

Jeep vehicles are delivered to a dealership on June 20, 2024 in Chicago, Illinois. 
Scott Olson | Getty Images

DETROIT — Stellantis U.S. new vehicle sales continued a yearslong freefall during the third quarter, despite CEO Carlos Tavares’ attempts to correct what he has called “arrogant” mistakes.
The Transatlantic carmaker reported U.S. sales Tuesday of 305,294 from July through September, a 19.8% decline from the third quarter of 2023 and an 11.5% decrease from the prior three months of this year.

Stellantis was expected to be the worst sales performer of major automakers during the third quarter. Auto industry forecaster Cox Automotive had projected a sales decline of roughly 21% for the automaker.
Cox and fellow forecaster Edmunds expect third-quarter sales industrywide will be down roughly 2% compared with a year earlier.
Still, Stellantis said its initiatives to boost sales and correct past mistakes are starting to pay off. The automaker cited a market share increase during the third quarter from 7.2% to 8% as well as an 11.6% reduction in its U.S. vehicle inventory.
“We continue to take the necessary actions to drive sales and prepare our dealer network and consumers for the arrival of 2025 models,” Matt Thompson, Stellantis head of U.S. retail sales, said in a release.
All of Stellantis’ brands except for its niche Fiat unit experienced sales declines in the third quarter, led by more than 40% reductions in Chrysler and Dodge. Its Ram truck brand recorded a roughly 19% decline, while Jeep was off about 6% year over year.

Stock chart icon

Stellantis, GM and Ford stocks in 2024.

Stellantis’ third-quarter sales are the latest problem this week for the carmaker, which cut its 2024 profit margin forecast and has been hit with a recall involving popular plug-in hybrid electric Jeep models due to fire risks.
Shares of the company on the New York Stock Exchange are off 41% this year. The stock hit a new 52-week low Tuesday and closed at $13.71, falling 2.4% for the day.
During a June investor event, Tavares said the company would correct “arrogant” mistakes made by himself and the company in the automaker’s U.S. operations that led to sales declines, bloated inventories and investor concerns.
He said the convergence of three factors led to the problems: not selling down vehicle inventory fast enough; manufacturing issues, specifically with two unnamed plants; and a lack of “sophistication in the way to go to market.”
U.S. sales for Stellantis, formerly Fiat Chrysler, have declined every year since a recent peak of 2.2 million in 2018. The company sold more than 1.5 million vehicles last year, a roughly 1% decline from 2022, when it reported a significant drop of 13% compared with the previous year.
Stellantis’ performance compares to the overall U.S. new light-duty vehicle sales market, which increased 13% last year, according to federal data.
Tavares has been on a profit-driven, cost-cutting mission since the company was formed through a merger between Fiat Chrysler and France’s PSA Groupe in January 2021.
He has prioritized profits and vehicle pricing over market share, leading to heavy criticism from the United Auto Workers union and Stellantis’ U.S. franchised dealers. More