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Deckers Brands Q1 net sales down 18.4 percent

By Prachi Singh

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Management

First quarter net sales at Deckers Brands decreased 18.4 percent to 174.4 million dollars compared to 213.8 million dollars for the same period last year. The company said that the year over year decrease was due to the timing of order shipments between quarters, a decrease in Direct-to-Consumer (DTC) comparable sales, and fewer close-out sales. On a constant currency basis, net sales decreased 18.8 percent.

“We are encouraged by our start to fiscal 2017, and we remain on track to deliver the sales and profitability targets we established for the year,” commented Dave Powers, President and Chief Executive Officer, adding, “Looking ahead, I am confident that our product lineup and marketing plans for this fall and holiday will help drive sales during our key selling season.”

First quarter financial highlights

Gross margin was 43.7 percent compared to 40.5 percent for the same period last year. Operating loss was 78.3 million dollars compared to 63.7 million dollars for the same period last year. Non-GAAP operating loss was 76.6 million dollars. Diluted loss per share was 1.84 dollars compared to 1.43 dollars for the same period last year. Non-GAAP diluted loss per share was 1.80 dollars.

UGG brand net sales decreased 19.8 percent to 91.9 million dollars compared to 114.5 million dollars for the same period last year. On a constant currency basis, sales decreased 20 percent. Teva brand net sales decreased 17.3 percent to 34.7 million dollars compared to 41.9 million dollars for the same period last year. On a constant currency basis, sales decreased 18.3 percent. The decrease in sales was driven by a decrease in global wholesale sales. Sanuk brand net sales decreased 20.2 percent to 26.7 million dollars compared to 33.5 million dollars for the same period last year on both a reported and constant currency basis.

Combined net sales of the company’s other brands decreased 11.6 percent to 21.1 million dollars compared to 23.9 million dollars for the same period last year. On a constant currency basis, sales decreased 11.8 percent. Hoka One One reported sales, which are included as part of the Company’s other brand sales, increased 1.8 percent to 17.6 million dollars.

Sales through distribution channels

Wholesale and distributor net sales for the first quarter decreased 24.3 percent to 116.1 million dollars. On a constant currency basis, sales decreased 24.6 percent. DTC net sales decreased 3.6 percent to 58.3 million dollars. On a constant currency basis, sales decreased 3.8 percent. DTC comparable sales for the first quarter decreased 7.3 percent over the same period last year.

Domestic net sales decreased 18.6 percent to 109.5 million dollars and international net sales decreased 18.2 percent to 64.9 million dollars. On a constant currency basis, sales decreased 19.1 percent.

Full year and second quarter outlook

The company continues to expect fiscal year 2017 net sales to be in the range of down 3 percent to flat. Gross margin is expected to be in the range of 47 percent to 47.5 percent. The company expects diluted earnings per share to be in the range of 4.05 dollars to 4.40 dollars.

The company expects second quarter net sales to be up 1 percent to 3 percent versus same period last year and diluted earnings per share of approximately 1.12 dollars to 1.22 dollars compared to 1.11 dollars for the same period last year.

picture:deckers brands

Deckers Brands