Update: Levi Strauss Fiscal Q2 Earnings Beat But Sales Lag Forecast; Shares Sink Premarket

(Updates with the stock move in the headline and the first paragraph.)

Levi Strauss (LEVI) shares extended declines in pre-market activity on Thursday to more than 15% after the company reported overnight a sales miss in fiscal Q2, taking the shine out of its earnings beat.

The company reported fiscal Q2 adjusted earnings late Wednesday of $0.16 per diluted share, up from $0.04 a year earlier.

Analysts polled by Capital IQ expected $0.11.

Net revenue in the quarter ended May 26 rose to $1.44 billion from $1.34 billion a year earlier.

Analysts surveyed by Capital IQ expected $1.45 billion.

The company continues to expect fiscal 2024 adjusted EPS of $1.17 to $1.27 on revenue growth of 1% to 3%. Analysts are looking for EPS of $1.27 on revenue of $6.35 billion.

The company raised its quarterly dividend by $0.01 to $0.13 a share, payable Aug. 20 to shareholders of record Aug. 2.

The company's "strategic shift" in distribution and logistics will result in a transitory increase in distribution costs in the near term.

"As part of our ongoing global productivity initiative, Project Fuel, the company will transition from a primarily owned-and-operated distribution and logistics network in the US and Europe to one that will be more balanced between owned and third-party logistics providers," according to a statement.