Following a mixed start to third-quarter earnings for the shoe industry last week, another list of footwear heavy hitters will enter the financial spotlight.
Here’s what you need to know.
On July 30, Goleta, Calif.-based Deckers Brands posted a mixed first quarter, with revenues topping analysts’ forecasts but weaker sales at Ugg and Sanuk dragging down margins, contributing to a net loss in the quarter.
Slower tourism in key markets such as Hawaii, Las Vegas and New York had already plagued the firm in Q4, with Ugg taking the brunt of the hit.
Teva however, saw a 6.8 percent increase in sales for the quarter, while Hoka One One and Ahnu had a combined increase of 86 percent in net sales, to $24 million, in Q1.
On Oct. 15, Deckers announced it had moved the Hoka One One brand team to its Goleta, Calif., office to better align the brand with all of the company’s resources.
Susquehanna LLLP Financial analyst Christopher Svezia is upbeat on the company and sees upside potential for the quarter and full-year.
Svezia predicts Q2 EPS of $1.06 “with potential upside on sales and margins on better sell-in of non-classic product.”
“We believe Deckers still has room for long-term growth despite near-term weather trends (i.e., international, smaller brands, etc.) while downside continues to be supported by buyback activity ($127 million remaining), a healthy cash balance, trough margins and an attractive valuation,” Svezia wrote.
Sequential Brands Group
Sequential Brands Group has been on an expansion mission this year. In the past month, the company closed its acquisition of Joe’s Brand; debuted Ellen Tracy at House of Fraser in Europe; and tapped singer-songwriter Tori Kelly as a the new face of William Rast, its fashion label that was co-founded by Justin Timberlake.
On Oct. 29, when the company reports Q3, Wall Street will get a glimpse into how all of that dealmaking is affecting profits and revenues.
On July 30, when Sequential reported Q2, the firm’s revenues climbed 189 percent, to $20.2 million, while its net losses grew to $1.3 million from $0.6 million in the comparable quarter.
Portland, Ore.-based Columbia Sportswear Co. raised its guidance after posting earnings that beat Wall Street’s forecasts for the second quarter, ended June 30, 2015.
Net sales were also up by double digits, to $380.2 million, though the firm experienced a net loss for the quarter. That loss, however, was not nearly as large as predicted by the Street. Diluted loss per share remained flat-year-over year, at 9 cents. Analysts were expecting a net loss of 23 cents per diluted share.
On Oct. 13, Svezia lowered his full-year estimates for the firm by a nickel, noting that while Columbia “has been rewarded [up 32 percent year-to-date] for a very strong performance this year, expectations have also risen, forcing us to stay on the sidelines on valuation.”
For Q3, Svezia forecast EPS of $1.07, sales growth of 7.9 percent, U.S. sales growth of 18 percent, gains in Canada of 7 percent and a 20 percent decline in EMEA.
Columbia is expected to report Q3 on Oct. 29.