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A pair of Levi’s self-cultivation jeans arranged in Louisville, Kentucky.

Luke Charette | bloomberg | Getty Images

Levi Strauss On Thursday, it sharply cut its profit forecast for the year after the clothing retailer reported a sharp drop in wholesale revenue and weak sales in the United States, its largest market.

However, the blue jeans seller saw bright spots in its direct-to-consumer sales and in the Chinese market.

Here’s what the company did in the fiscal second quarter compared to what Wall Street was expecting, based on a survey of analysts conducted by Refinitiv:

  • Earnings per share: 4 cents adjusted vs. 3 cents expected
  • he won: $1.34 billion versus the expected $1.34 billion

The company’s net loss for the three months ended May 28 was $1.6 million, or 0 cents per share, compared to net income of $49.7 million, or 12 cents per share, a year ago. During the quarter, Levi’s reported adjusted earnings of 4 cents per share.

Sales fell to $1.34 billion, down 9% from $1.47 billion a year earlier.

Halfway through the fiscal year, Levi’s lowered its earnings forecast for the full year. It now expects adjusted earnings per share of $1.10 to $1.20, compared to the previous range of $1.30 to $1.40.

Levy’s also tightened its revenue forecast for this year. The retailer now expects sales to grow between 1.5% to 2.5% compared to the previous range of 1.5% to 3%.

Harmeet Singh, Levy’s chief financial officer and growth officer, told CNBC the dismal outlook was due to a number of factors, but was driven by an expected slowdown in US wholesale revenue, which fell 22% in the quarter.

The company also plans price cuts on about half a dozen more price-sensitive items, like the 502 jeans, and plans for a higher tax rate. Levi’s effective tax rate for the quarter was 78.4%, compared to 36.1% in the year-ago period.

“Our view of wholesaling in the US, even with the price action we’re making and everything else, we’re very cautious about it,” CEO Chip Bergh told CNBC during an interview. “Just in light of recent performance, current overall headwinds, and just the consumer dynamics in this market.”

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