Deckers Misses Expectations in Q3 as Demand Slows
Net income for the firm was $156.7 million, or $4.50 per diluted share. While it was an increase of 11.2 percent compared with the year ago period of $140.9 million or $4.04 per share, it was a miss compared to investors expectations, which was $4.52 per share for the quarter.
Revenue during the quarter reached $784.7 million, a 6.6 percent jump compared with the year-ago period, when sales were $736 million. It was a significant sales miss, however, during a historically top-performing quarter for the brand. Analysts had predicted that the company would have sales of $813.70 million.
Ugg Australia suffered from mild weather in November, currency fluctuations abroad and overall slowing demand. The brand did see stronger demand for the new product but orders were underestimated and reorders couldn’t be filled.
The company announced it was moderating the pace of store openings and merchandising strategy as a result of the quarter.
Additionally, revenue guidance was adjusted down for the year to be $1.8 billion, versus initially announced $1.825 billion. Diluted earnings per share expectations were also adjusted down to $4.58 from $4.71.
Coach Inc. Reports Better-Than-Expected Profit, Misses Revenue
Net income was $200 million, or 72 cents per diluted share for the quarter, excluding acquisition costs. Reported net income was $183 million, or 66 cents per diluted share. In the year-ago period, net income was $297.4 million, or $1.06 per share. Analysts had predicted 66 cents per share for the period ending on Dec. 27.
Revenue for the quarter fell 14 percent from the year-ago period of $1.42 billion to $1.22 billion. On a currency-neutral basis, revenues were down 12 percent. Analysts expected revenue of $1.23 billion.
The company also announced that North American sales shrank during the quarter, down 20 percent, to $785 million, and comparable-store sales fell 22 percent. International sales rose 5 percent on a currency-neutral basis.
Andre Cohen was named Coach’s new president for North America, succeeding Francine Della Badia, who led North American retail.
David Duplantis, president for global digital and customer experience, will expand his responsibilities to include global marketing and customer intelligence.
The company’s Stuart Weitzman acquisition did rack up some expenses in the quarter. The deal is expected to close soon.
Alibaba Disappoints in Q3
Jack Ma and his e-tail dynamo, China-based Alibaba Group Holding, turned in disappointing numbers for the third quarter as it faced slowing advertising sales and regulator allegations.
The e-commerce giant’s revenues missed estimates, coming in at $4.2 billion for the period. Analysts had been expecting $4.5 billion.
Alibaba shares fell more than 10 percent early Thursday morning, its steepest drop since the firm went public in September.
The earnings report comes on the heels of the Chinese government alleging that Alibaba has not adequately cracked down on fakes and other questionable business practices on its sites.
Kate Spade to Restructure Saturday, Jack Spade & Expands in China
Kate Spade & Co. announced big changes this morning.
The company plans to close the Kate Spade Saturday business and absorb it into the Kate Spade New York business. This means the 16 company owned and three partner Saturday stores will close in the first half of the year. The e-commerce business will remain open temporarily as well. The Jack Spade label is also getting a facelift. The brand will shutter 12 company owned stores in the first half of 2015. The Jack Spade business will focus on e-commerce and its wholesale business and aim to be a more complete lifestyle brand focused on tailored clothing, sportswear and bags.
The firm also announced a new 10-year partnership with Walton Brown, a subsidiary of The Lane Crawford Joyce Group, to expand its presence in China. As part of the agreement, the Kate Spade & Co. believes there are potential for 100 retail stores in the area.
The company also updated 2014 fiscal year guidance and expectations for 2015. The firm expected to report $1.13 billion to $1.14 billion in DTC sales. Analysts expected revenue to be $1.1 billion. For 2015, the company forecasted sales of $1.2 billion to $1.28 billion, below the $1.39 billion analysts expected the company to bring in.