Deckers Outdoor Corporation
) rose nearly 7% in the after-hours trading session as the
company posted narrower-than-expected loss for the three-month
transition period ended Mar 31, 2014.
Deckers has changed its fiscal year from Dec 31 to Mar 31. As
part of the process, the company has referred to the three month
period ended Mar 31, 2014 as the transition period. The results
of the transition period are compared with the results for the
first quarter of fiscal 2013 ended Mar 31, 2013. Also, the
company is transferring its listing from Nasdaq to NYSE and will
begin trading on NYSE on May 5, 2014 under the current symbol
The company posted a loss of 8 cents per share as against the
Zacks Consensus Estimate of loss of 16 cents and earnings of 3
cents reported in first-quarter 2013.
Deckers' net sales jumped 11.7% year over year to $294.7 million
and came ahead of the Zacks Consensus Estimate of $285 million.
The quarterly performance was aided by robust sales of UGG and
HOKA ONE ONEâ brands as well as stellar comps and e-Commerce
Deckers continues to focus on developing its Omni-channel
capability to further improve sales.
During the quarter, the company's domestic sales grew 8.5% year
over year to $198.3 million while international sales increased
18.9% to $96.4 million. Direct-to-Consumer comparable sales,
comprising worldwide retail comparable-store sales (comps) and
e-Commerce sales, rose 16.9%.
Gross profit climbed 16.8% to $144.3 million from the comparable
prior-year quarter, while gross margin rose 210 basis points to
48.9%. Deckers reported an operating loss of $408 million, as
against operating income of $2,652 million in the prior-year
brand net sales rose 15.8% to $197.6 million, primarily due to
sales generation from new retail outlets, comps growth, rise in
global e-Commerce sales and increase in domestic wholesale sales.
brand net sales fell 9.2% to $46.8 million, reflecting a fall in
domestic wholesale sales.
Sales for the
brand, known for its exclusive sandals and shoes, were $30.7
million, down 0.8% from the year-ago quarter, reflecting lower
international distributor sales, partly offset by rise in
domestic wholesale, retail and E-Commerce sales.
Combined net sales of Deckers'
brands for the quarter were $19.6 million that surged 84.3% year
over year on the back of HOKA ONE ONEâ brand.
sales increased 26.1% to $80.1 million, propelled by the opening
of 42 new stores after first-quarter 2013 and comps growth of
4.0%. Deckers witnessed comps growth of 43% in Asia-Pacific and
15% in North America, partly offset by a 5% comps decline in
Europe, Middle East and Africa (EMEA).
sales surged 45.0% to $38.6 million, reflecting robust demand of
the UGG brand globally, higher domestic sales of Sanuk and Teva
brands along with new international e-Commerce websites and HOKA
ONE ONEâ brand domestic website.
Deckers plans to open 30-35 stores during fiscal 2015, up from
earlier expectation of 25 stores. The company currently operates
120 company-owned retail stores. Deckers remains optimistic about
achieving the target of 200 stores in the long run.
Other Financial Aspects
Deckers, which competes with
Iconix Brand Group, Inc.
), ended the quarter with cash and cash equivalents of $245.0
million. Shareholders' equity was $888.8 million at the end of
the quarter. Inventories declined 17.7% year over year to $211.5
Guidance for Fiscal 2015
This Zacks Rank #3 (Hold) stock now projects total revenue growth
of 13% for fiscal 2015, anticipating sales growth of 11% in UGG
brand, 11% in Teva brand, 15% in Sanuk brand and sales worth $82
million from other brands. Management now envisions a 13.5% rise
in 2015 earnings per share.
Deckers forecasts 12.0% revenue growth but anticipates a loss of
$1.33 a share for the first quarter of 2015.
Management anticipates capital expenditures of $100 million for
fiscal 2015, comprising of $37 million for IT and infrastructure
improvement, $30 million for new outlets and $26 million for
building a new distribution center.
Other Stocks to Consider
Investors interested in the same sector could consider stocks
Skechers USA Inc.
Brown Shoe Co. Inc.
). While Skechers sports a Zacks Rank #1 (Strong Buy), Brown Shoe
has a Zacks Rank #2 (Buy).
BROWN SHOE CO (BWS): Free Stock Analysis
DECKERS OUTDOOR (DECK): Free Stock Analysis
ICONIX BRAND GP (ICON): Free Stock Analysis
SKECHERS USA-A (SKX): Free Stock Analysis
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