Decker Jumps on Solid Online and Retail Sales

Michael Teague |

Deckers Outdoor Corp. (DECK), maker of the popular UGG boots line, started off Friday on the right foot, so to speak.  Shares saw gains of over 13 percent Friday, reaching above $46 at one point, and continuing an upward trend.

The company’s strong showing follows in the wake of a fourth-quarter earnings statement that beat estimates. For Q4, Decker reported a 23 percent decline in net income to $97 million, or $2.77 per share, versus $126 million, or $3.18 per share, from the year prior. Revenue grew 2 percent to $617. 3 million. While profits came in better than the expected $2.57 per share, revenue missed the mark of $621.9 million, according to FactSet Research.

A decline in inventory from $486 million in Q3 to $300 million in Q4 must also be playing a significant role in Friday’s increase.  Overall sales increased by 2 percent, while UGG’s wholesale loss of 11 percent was corrected by a 37 percent increase in retail, for a total of $135.5 million, and a nearly 31 percent increase, a total of $87.6 million, in online sales.

Deckers’ exclusive Sanuk sandals and shoes brand brought in $13.9 million in sales, a gain of over 39 percent on Q4 2011, while the Teva brand’s net sales dropped 29.5 percent to $13.7 million.

Even though sheepskin prices were down in the second half of 2012, Decker was not able to benefit as they had committed to purchases at an earlier time and higher price.  The company is expected to benefit from the decrease in 2012, however, which, along with the increase in online sales and better inventory management (especially the clearance of old and poorly selling items), could see the company posting more such numbers throughout the rest of the year.

For 2013, Decker said it expects a per-share profit of $3.62 on revenue in around $1.51 billion, led mainly by its UGG unit. Analysts expect net income of $3.71 per share and $1.49 billion in revenue on average.

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Companies

Symbol Name Price Change % Volume
DECK Deckers Outdoor Corporation 63.04 1.70 2.77 290,252
PCF.U:CA Energy Credit Opportunities Income Fund Class U Un 7.22 0.00 0.00 0

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