Deckers Sees Earnings Rise in Q3

Deckers Outdoor Corp. beat expectations again.

The Goleta, Calif.-based firm said Thursday its third-quarter profit increased by a quarter, and it is seeing sell-through rates accelerating into the fourth quarter.

For the period ended Sept. 30, Deckers’ net income rose 25 percent to $42.1 million, or $1.07 a share, compared with $33.8 million, or 86 cents, a year earlier.

Net sales increased 22 percent to $277.9 million, while gross margins rose to 47 percent.

Analysts had forecast 93 cents a share on revenue of $265.9 million, as polled by Yahoo Finance.

Deckers saw broad-based sales increases in the quarter. Ugg brand sales jumped 20 percent to $255.8 million, while Teva brand sales spiked 52 percent to $13.7 million.

Teva’s second-half momentum was driven by increased shipments of the brand’s fall collection, led by an expanded offering of closed-toe products, coupled with strong in-season demand for its sandal assortment, according to Angel Martinez, chairman, president and CEO of Deckers.

Ugg contributed a large chunk to operating income, said the firm. Going forward, Martinez said, “the opportunities that exist around the world for us to solidify the category leadership of Ugg is very important … particularly in markets such as Asia, where … brands are built on a retail foundation.”

Martinez added that the firm will “move aggressively” to open new retail doors for Ugg worldwide.

Meanwhile, input costs are expected to rise between 5 percent and 10 percent next year, Deckers said.

International sales surged 48 percent to $73.2 million, retail sales increased 63 percent to $20.2 million and same-store results rose 17.9 percent.

Combined net sales of the firm’s other brands increased 27 percent to $8.4 million, driven by an improvement in domestic shipments of fall product.

“We are encouraged by the current trends in our business and believe we are well positioned for a very good holiday selling season,” said Martinez.

Deckers ended the quarter with $250.5 million in cash and no debt.

The firm raised its full-year forecast for earnings per share to grow 22 percent, from 16 percent, and revenue to grow 16 percent, compared with a previous guidance of approximately 14 percent.

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