Deckers Outdoor Corp. beats estimates despite drop in net sales
California-based outdoor footwear company Deckers Outdoor Corp., which owns brands such as Uggs and Teva, saw net sales fall 2.4 percent to $369.5 million in its fourth quarter, on an adjusted basis and closed 31 March, but surprised investors by delivering higher revenues and an unexpected profit.
Deckers reported a significant drop in one of its major brands, Teva. The footwear brand saw net sales fall 13.3 percent this quarter to $51.3 million. Deckers attributed the decrease to an overall decrease in global wholesale sales. Sanuk saw an even steeper drop, with sales falling 16.1 percent to $32.3 million.
Deckers most prominent brand Uggs saw net sales fall 1.1 percent to $243 million, with an increase in international wholesale sales helping to offset a decease in domestic sales.
Over the quarter, its operational loss, including restructuring costs, stood at 30.9 million dollars compared to 27.9 million over the same period last year.
Over the year, the group announced a sales decrease of 4.5% to 1.790 billion dollars. At constant exchange rates, it is a fall of 4.1%. Ugg, with sales of 1.451 billion dollars recorded a drop of 4.8%. Teva's sales slipped by 11.5% to less than 118 million and Sanuk saw sales plunge 13.6% to less than 92 million. Finally, the group's other brands advanced 16.2% to close to 130 million, with Hoka One One showing growth of 32.7% over the last quarter. International sales accounted for $649 million over the period.
Dave Powers, who was appointed CEO of the company in 2016, emphasized Deckers’ savings measures in the company's plan to go forward. “We now anticipate that the $150 million cumulative savings plan announced in February 2017 will drive a $100 million operating profit improvement by fiscal year 2020. I am proud of the work the team has accomplished, and I believe we have laid a solid foundation to execute on our savings plan,” Powers said in a statement.
Also part of the company’s plans to increase sales are goals to speed up the development of new products and move production out of China. Deckers also plans to close certain retail locations to increase revenues going forward, targeting $2 billion in sales with an operating margin of 13% in 2020.
Last month, Deckers announced the possibility of selling the company. The Goleta, California-based company has seen weak sales in its brands in the most recent quarters.
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