Deckers Q3 Profit, Sales Better-Than-Expected

UGGGoleta, CA—Deckers Outdoor Corp. saw its shares jumps as much as 20% today after the footwear company reported late Thursday better-than-expected third quarter earnings.

The maker of UGG Australia, Teva and Sanuk footwear also raised its full-year profit outlook, although it lowered its fourth quarter forecast citing higher holiday promotion costs.

For the quarter ended Sept. 30, Deckers posted profit of $33.1 million, or 95 cents a share, compared with $43.1 million, or $1.18 a share, a year ago. That beat analysts’ estimate expecting 72 cents a share.

‘More Diversified Business’

Net revenue rose 2.7% to $386.7 million, slightly better than analysts’ estimate for $385.9 million in sales.

By brand, UGG posted a 1.3% increase in sales to $337 million aided by the launch of new websites and new store openings. Teva and Sanuk brands also rose slightly. Gross margin improved 90 basis points to 43.2% compared to 42.3% .

CEO Angel Martinez credited the development of year-round footwear offerings in UGG to improved sales.

On a conference call with analysts, Martinez said Deckers’ plan is paying off “as we build a more diversified global business … and deliver our expanding product line to consumers worldwide.”

Although UGG saw demand damped in the last two holidays seasons due to warmer weather, Experian reported this week that UGG was the No. 1 holiday search item so far this season.

Deckers increased its full year earnings forecast to up 10% to $3.80 a share, up from its earlier projection for an 8% increase.

That’s ahead of analysts’ average estimate for $3.77 a share. Nonetheless, it fourth quarter outlook for $3.66 a share is below analysts’ projection for $3.88 a share.

 

 

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Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com