Deckers sales hindered by challenging retail, EPS reaches top of expectations

By

Obi Anyanwu

Published
Oct 28, 2016

Deckers was pleased with its second quarter fiscal 2017 results that was released on Thursday. President and CEO Dave Powers commented that the company “delivered earnings per share results that were higher than last year and at the top end of our expectations” despite the difficult retail environment.

 
Second quarter net sales fell 0.2% to $485.9 million from $486.9 million in the previous year’s second quarter, and on a constant currency basis, net sales increased 0.3%. Combined net sales, domestic net sales, and Sanuk brand sales all increased 23.3%, 3.6%, and 9.2%, respectively.
 
The Ugg and Teva brands net sales, wholesale and distributor net sales, direct-to-consumer net sales, and international net sales all decreased including on a constant currency basis.

Diluted earnings per share increased to $1.21 compared to $1.11 in the prior year second quarter, and non-GAAP diluted earnings per share was $1.23.
 
Gross margin was 44.5% compared to 44.0%, SG&A expenses as a percentage of sales were 33.4% compared to 33.5%, and operating income was $54.0 million compared to $51.2 million.
 
“We are pleased with the results of our second quarter and the progress on our plans for the year,” said Powers. “Looking ahead, our teams are prepared for the upcoming selling season, and we are excited about our fall and holiday product and marketing plans.”
 
Deckers updated its third quarter and fiscal 2017 outlooks following the results of the second quarter. The company now expects third quarter diluted EPS to be in range of $4.16 and $4.28 and for full year diluted EPS to range between $4.05 to $4.25.