Ugg Fuels Deckers’ Earnings Uptick

Deckers Outdoor Corp. continues to cash in on its Ugg brand and posted second-quarter earnings well above analyst expectations.
The Goleta, Calif.-based company reported on Thursday a $2.9 million profit, or 22 cents a diluted share, for the three months ended June 30, versus a net loss of $3.8 million, or 29 cents, for the second quarter last year. Analysts had forecasted an earnings per share decline of 9 cents.
Adjusted for impairment charges of $1 million taken in the second quarter, related to the Tsubo brand, Deckers reported an EPS of 26 cents, while the adjusted EPS for the year-ago period, which includes a $14 million charge related to the Teva brand, was 39 cents.
Deckers’ second-quarter revenues increased by 13 percent to $102.5 million, from $91.1 million in the year-ago period. Deckers’ largest brand, Ugg Australia, led the company in sales growth, jumping 23 percent to $74.4 million. Teva and Simple, on the other hand, both declined in revenue by 11 percent and 25 percent, respectively. Deckers’ Tsubo and Ahnu brands accounted for $2.1 million for the period.
For the first half of 2009, Deckers’ net income totaled $15.2 million, or $1.15 a diluted share, a 103 percent increase from the year-ago period. Sales for the first six months rose 26 percent to $236.8 million.
In a statement, Angel Martinez, president, CEO and chairman of Deckers, attributed the company’s impressive earnings to “lower-than-projected operating expenses, a shift in certain marketing expenses to the second half of the year and to a lesser extent, higher sales.”
Deckers also raised its full-year revenue expectations and now forecasts 9 percent to 10 percent growth over last year’s sales, versus previous guidance of a 7 percent to 9 percent increase. The company reiterated non-GAAP diluted EPS guidance as flat or slightly up on its 2008 EPS of $7.27.

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