Levi Strauss & Co. forecast annual sales and profit below Wall Street expectations Thursday, and said it would cut 10% to 15% of global corporate jobs as the denim maker seeks to rein in costs amid weakness in its wholesale business.

Shares of the company fell more than 5% in extended trading.

Levi blamed its plan to exit its Denizen brand and cut back on off-price sales this year for the weak forecasts while also missing fourth-quarter revenue estimates.

The fallout of an inventory glut last year and a pressured low-income consumer are weighing on the company’s wholesale channel and neutralizing the gains in its direct-to-consumer (DTC) business from strong demand from higher-income consumers.

“The value-conscious consumer is under pressure … even though we have decent momentum as we enter 2024, our outlook is cautious,” Chief Financial and Growth Officer Harmit Singh said in an interview.

Levi’s total wholesale business, which accounted for about 62% of its net revenues in 2022, saw sales dip 3% on a constant-currency basis in the quarter ended Nov. 26.

The phase-out of Denizen brand, which is cheaper than the Levi’s brand and sells at a lower margin, will assist the company’s premiumization plans, expand its assortment of higher-priced denim and add other categories such as athletic wear, Singh said.

The layoffs are set to occur in the first half of 2024, and, coupled with more DTC-focused initiatives, would generate net cost savings of $100 million in 2024.

The company will take a $110 million to $120 million charge related to the job cuts in the current quarter.

Levi currently has about 20,000 workers globally, with roughly 5,000 corporate employees.

The company projected fiscal 2024 net revenue growth of 1% to 3%, compared with analysts’ estimate for a 4.7% increase to $6.49 billion, according to LSEG data.

Levi’s expects adjusted per-share profit of $1.15 to $1.25, lower than estimates of $1.33.

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