Deckers Brands on Thursday announced Q4 earnings and sales that significantly surpassed forecasts but the company’s stock is down in aftermarket trading — likely due to softer-than expected full-year and Q1 outlook.
The firm, which owns shoe brands Ugg, Teva, Hoka One One and others, also simultaneously announced that CEO Angel Martinez will retire on May 31 and will be succeeded by company president Dave Powers. Powers had been promoted to company president in March 2015. Martinez will continue to serve as chairman of the company’s board after his retirement.
In Q4, Deckers posted a net loss of $23.7 million, or 73 cents per diluted share, compared with net income of $1.4 million, or 4 cents per diluted share in the comparable period. Non-GAAP diluted earnings per share were 11 cents. Analysts were expecting the firm to post diluted earnings per share of 6 cents.
Fourth-quarter sales advanced 11.2 percent to a $378.6 million compared to $340.6 million in the same period last year. Market watchers had predicted sales of $362.6 million.
“Our stronger than expected fourth quarter Non-GAAP operating results are very encouraging given the current market environment,” Martinez said in a release. “Looking back on the year, our performance was challenged by record warm weather across the globe and store traffic declines across retail. While these issues have created lingering headwinds for the industry, I am confident that Deckers is well positioned to increase long-term shareholder value with the new leadership team in place, our robust omnichannel capabilities and strong brand portfolio.”
By brand, Ugg sales advanced 13.3 percent and Teva sales increased 11.3 percent while revenues at Sanuk slipped 2 percent.
For the full year, Deckers said total sales increased 3.2 percent, to $1.9 billion compared to $1.8 billion last year. On a constant currency basis, net sales increased 5.9 percent. Net income declined 25 percent, to $122 million, or $3.70 per diluted share, from $162 million, or $4.66 per diluted share, in the previous year.
Despite a better-than-expected Q4 performance, the company said it expects sales to decline by 3 percent in fiscal year 2017 while earnings per share are expected in the range of $4.05 to $4.40.
The company also expects Q1 net sales to be down 20 to 25 percent. It also forecast a diluted loss per share of approximately $2.10 to $2.20 compared to a diluted loss per share of $1.43 for the same period last year. The decline in net sales is primarily due to the timing of order shipments between quarters, the company said.