Deckers Outdoor Corp. hit a 52-week high on Friday after the firm surpassed Wall Street estimates in the third quarter.
The Goleta, Calif.-based firm said net income fell 23.2 percent to $33.1 million, or 95 cents a diluted share. That beat Wall Street’s prediction by 24 cents.
For the quarter ended Sept. 30, net sales rose 2.8 percent to $386.7 million. Executives credited the acquisition of the Hoka One One brand for the increase in revenue.
The company also is benefiting from the lower cost of sheepskin, the key component for its Ugg Australia label. Growth in China helped the brand report revenue increases of 1.3 percent.
“We believe the company is back on track to double-digit earnings growth after several years of pain from warm weather and execution missteps,” wrote Scott Krasik, an analyst with BB&T, in an earnings note. “Deckers has emerged from this more strategically focused on growing Ugg for the long-term. Ugg is diversifying away from core classics into transitional products to reduce the seasonality of the business.”
Analysts also pointed to the company’s decreased inventory as a good sign.
“This company has had everything against it, and things are finally turning in their favor,” said Camilo Lyon, an analyst with Cannacord Genuity. “You really see all aspects of the business improving, no matter big or small. It’s a big improvement on the gross margin side, a modest improvement on the sales side and large improvement in the inventory.”
Deckers also raised its full-year outlook. The company reiterated a revenue increase of 8 percent over 2012 levels. Earnings per share are now expected to rise 10 percent over 2012, compared with the previous projection for 8 percent growth.
“The Ugg brand has shown great resiliency over the past year, driven by innovative new products and advancements in our marketing, merchandising and selling strategies,” Angel Martinez, Deckers’ president and CEO, said in a statement. “The fall selling season started well, led by demand for our expanded collection of casual shoes and boots. As we move further into the back half of the year, sell-through of our core classic and slipper collections is accelerating.”
Shares were up more than 20 percent on Friday, closing at $69.99.