Deckers struggles in US, Ugg sales fall 4.5% in Q3

By

Obi Anyanwu

Published
Feb 6, 2017

Deckers Brands on Thursday reported its third quarter financial results. Sales for the quarter fell 4.5% from last year to $760.3 million and diluted earnings per share was $1.27 compared to $4.78 in the prior year.

 
Ugg brand net sales decreased 5.3%, or 4.4% on a constant currency basis, to $704.0 million due to lower domestic wholesale sales and “a slower than expected start to the quarter,” according to the report.
 
Teva performed well for the brand increasing 3.9% in the quarter to $14.6 million driven by increased global direct-to-consumer sales.

DTC net sales increased 5.8% to $371.7 million and DTC comparable sales jumped 4.7% over the previous year. This performance was offset by a 12.6% decrease in wholesale and distributor net sales.
 
Domestic net sales fell 9.9% to $489.5 million compared to $543.3 million and international net sales increased 7.2% to $270.8 million from $252.6 million.
 
“While the slow start to the holiday season limited our reorder opportunities and led to a shortfall in third quarter sales and earnings, sell-through of the Ugg brand accelerated sharply late in the quarter,” said Dave Powers, President and CEO. “Our December performance helped drive a positive 4.7% direct-to-consumer comparable sales increase and also ensured that our wholesale partners ended the calendar year with cleaner inventory levels compared with a year ago. While we are disappointed that our overall results fell short of projections, we are confident that our product, pricing and distribution strategies will benefit the long-term health of the UGG brand.”
 
For the fourth quarter, Deckers expects net sales to be down 6% of 5% from last year and for non-GAAP diluted earnings per share to be in range of a loss of $0.10 to break even. The company expects its full year net sales to be down 5.0% and expects its non-GAAP diluted earnings per share to be in range of $3.45 and $3.55.