Did Ugg’s Latest Revenues Just Show Some Serious Comeback Potential?

ugg foldover boot
Ugg Lynda folder cuff boot in suede with shearling lining.
Courtesy of Ugg

After a few soft quarters, Deckers Brands today reported first-quarter sales and profit that significantly topped market watcher predictions.

The parent company of Ugg, Teva, Hoka One One and other popular shoe brands said its first-quarter revenues rose more than 20 percent to $209.7 million and surpassed analysts’ estimates for revenues of $178.5 million.

The firm also narrowed its net losses to $42.1 million, or $1.32 per diluted share, from $52.3 million, or $1.84 per diluted share. Adjusted net losses per share, at $1.28, also bested market watcher’s forecasts for losses per share of $1.67.

Meanwhile, Deckers’ hero brand Ugg seemed to emerge from some softness in the quarter, posting a sales gain of 25 percent to $114.7 million.

The top- and bottom-line beats, as well as Ugg’s surge, weren’t due solely to high demand, however. Deckers president and CEO Dave Powers noted that a shift in fall order shipments also helped the firm pull off a solid Q1.

“Our first-quarter results reflect solid consumer demand for our spring product offering across our brands, combined with earlier-than-planned shipments of certain fall orders,” Powers said in a release. “While it is still early in the year, we are encouraged by our recent top-line performance.”

In addition to earlier-than-planned global order shipments, the company noted that an increase in direct-to-consumer comparable sales, and stronger-than-expected sales in the Hoka One One brand — which were up 74 percent to $30.7 million — were also a boon to its Q1 results.

Teva sales for the first quarter also showed a gain of 8.6 percent to $37.7 million, and revenues at Sanuk remained flat year-over-year at $26.2 million.

“Looking ahead, we believe the product, marketing and distribution strategies we’ve implemented across our brand portfolio, along with the anticipated benefits from our cost savings initiatives, have us well positioned to achieve the operating profit improvement targets we established for fiscal 2018 and longer-term,” Powers said.

Deckers maintained its full-year outlook, which called for sales in the range of down 2 percent to flat and adjusted diluted EPS in the range of $3.95 to $4.15.

In the nearer term, the company expects second-quarter fiscal 2018 net sales to be down 10 percent versus the same period last year, primarily as a result of store closures and the earlier-than-planned Q1 shipment.

Q2 adjusted diluted EPS are expected to be $1.00 to $1.05, compared with $1.23 for the same period last year.