Ugg Parent Deckers Brands Posts Better-Than-Expected First Quarter

Deckers Brands on Thursday posted Q1 earnings after the market close that were better than expected despite it being the company’s smallest quarter.

The Goleta, Calif.-based owner of Ugg, Teva, Sanuk and other footwear brands posted a net loss of $58.9 million, or $1.84 per diluted share, a greater loss than the same period last year when the company’s net losses totaled $47.3 million, or $1.43 per diluted share. Adjusted loss per share was $1.80. Still, the results better than market watcher’s estimates for loss per share of $2.07.

Revenues also slipped 18 percent, to $174.4 million, from $213.8 million in the comparable period. Those results also topped forecasts for revenues of $170.3 million.

We are encouraged by our start to fiscal 2017, and we remain on track to deliver the sales and profitability targets we established for the year,” said Deckers president and CEO Dave Powers in a release. “I am excited about the progress we are making in this transitional year, and believe we are positioning the Company to capitalize on the opportunities in front of us.”

Net sales for Ugg decreased 20 percent, to $91.9 million, during the quarter. The company said the slip in sales was driven by several factors including a shift in the timing of order shipments between quarters that impacted global wholesale and distributor sales, a decrease in DTC comparable sales and fewer close-out sales.

Teva brand net sales, driven by a decrease in global wholesale sales, declined 17.3 percent, or 18.3 percent on a constant currency basis, to $34.7 million.

Also driven by a decrease in global wholesale sales, Sanuk revenues for the quarter slipped 20.2 percent, to $26.7 million.

The combined net sales of the company’s other brands decreased 11.6 percent, to $21.1 million. The only brand in the stable to post a gain, Hoka One One, saw a 1.8 percent rise in reported sales, to $17.6 million. (Hoka One One sales are including as part of Deckers’ other brand sales.)

Looking ahead, I am confident that our product lineup and marketing plans for this fall and holiday will help drive sales during our key selling season,” Powers said.

Deckers maintained its full-year outlook and continues to expect FY17 net sales in the range of flat to down 3 percent and EPS in the range of $4.05 to $4.40.

As of 4:30 p.m. ET, the company’s shares had gained 2.5 percent, to $65, in after hours trading.

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