Deckers positive despite second quarter loss

REPORT_ US footwear company Deckers Outdoor Corporation, which owns brands such as UGG Australia and Teva, announced its results for the second quarter that ended on 30th June. The Goleta, California-based company reported a net

loss of 29.3 million dollars and a net sales decline by 2.5 percent. Despite this being the sixth consecutive quarter with either a loss or drop in profits, Deckers remains optimistic and raised its guidance for the rest of the year.

“We are pleased with the second quarter, and while it is our smallest quarter, it was an important transition period for the Ugg brand that has positioned the company for a good back half of the year,” commented Angel Martinez, president, CEO and chair of the board of directors.

Net loss increased by 46 percent

Compared to the same period last year, the company’s net loss increased by almost 46 percent from 20.1 million dollars to 29.3 million dollars or from 53 cents to 85 cents per share. Net sales declined by 2.5 percent from 174.4 million dollars a year ago to 170.1 million dollars during the second quarter.

Among Deckers’ main brands, only Sanuk showed a sales increase, namely of 7.5 percent to 30.1 million dollars, compared to 28 million dollars in the second quarter last year. Sales for UGG Australia decreased year-on-year by 6.9 percent from 107.9 million dollars to 100.4 million dollars and for the Teva brand by 8.4 percent from 34.1 million dollars to 31.2 million dollars.

“We experienced solid sell-through of the Ugg brand’s spring line in our wholesale and e-commerce channels, and we believe the consumer response to the initial deliveries of our new transitional fall product has been very positive. While less-than-favorable weather negatively impacted sandal sales for the Teva and Sanuk brands, we reacted quickly to deliver bottom-line results that were better than planned,” explained Martinez the channel and brand results.

Retail and e-commerce sales increased

Retails sales increased by 29.1 percent to 32.5 million dollars in the second quarter 2013 compared to 25.2 million dollars in the same period last year; however, same store sales decreased by 5.3 percent. E-commerce sales increased by 34.2 percent from 8 million dollars last year to 10.7 million dollars during the second quarter 2013.

Domestic sales continued to be stronger than international ones but decreased for the quarter by 3 percent to 110.1 million dollars compared to 113.5 million dollars last year. International sales fell slightly by 1.6 percent from 61 million dollars to 60 million dollars.

Deckers Outdoor remains optimistic and raised its guidance, expecting an 8 percent increase for full-year earnings per share as well as a sales increase by 8 percent. “We remain optimistic about our ability to expand sales and margins as we head into our highest-volume sales quarters, and we continue to be excited about the many long-term growth opportunities that we believe exist for our business,” closed Martinez his assessment.

Image: UGG Australia / Deckers