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Deckers Brands posts Q1 sales growth of 20.3 percent

By Prachi Singh

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Report

First quarter net sales at Deckers Brands increased 20.3 percent to 209.7 million dollars compared to 174.4 million dollars for the same period last year. The year-over-year increase, the company said, was primarily due to earlier than planned global wholesale shipments, an increase in direct-to-consumer (DTC) comparable sales, and stronger than expected sales in the Hoka One One brand. On a constant currency basis, net sales increased 21.5 percent.

“Our first quarter results reflect solid consumer demand for our spring product offering across our brands combined with earlier than planned shipments of certain fall orders,” commented Dave Powers, President and CEO in a statement, adding, “While it is still early in the year, we are encouraged by our recent top-line performance.”

First quarter financial review

UGG brand net sales for the quarter increased 24.9 percent to 114.7 million dollars and on a constant currency basis, sales increased 26.6 percent.

Hoka One One brand net sales increased 74.2 percent to 30.7 million dollars compared to 17.6 million dollars for the same period last year. On a constant currency basis, sales increased 75.3 percent. Teva brand net sales increased 8.6 percent to 37.7 million dollars, while on a constant currency basis, sales increased 9.8 percent.

Sanuk brand net sales were 26.2 million dollars compared to 26.7 million dollars for the same period last year, a decrease of 2 percent on both a reported and constant currency basis driven by the transfer of a retail store to a partner at the end of the last fiscal year.

Gross margin for the quarter was 43.2 percent compared to 43.7 percent for the same period last year. The company added that gross margin was slightly better than expected, and included an 80 basis point headwind from changes in foreign currency exchange rates.

Operating loss was 56.3 million dollars compared to 78.3 million dollars for the same period last year. Non-GAAP operating loss was 54.3 million dollars. Diluted loss per share was 1.32 dollars compared to 1.84 dollars for the same period last year, while non-GAAP diluted loss per share was 1.28 dollars.

Sales performance by channel and geography

Wholesale net sales for the first quarter increased 24.5 percent to 144.6 million dollars and on a constant currency basis, sales increased 25.1 percent. DTC net sales increased 11.8 percent to 65.1 million dollars, on a constant currency basis, sales increased 14.3 percent. DTC comparable sales for the quarter increased 12.7 percent over the same period last year.

Domestic net sales increased 10.2 percent to 120.7 million dollars compared to 109.5 million dollars for the same period last year. International net sales increased 37.2 percent to 89 million dollars compared to 64.9 million dollars for the same period last year. On a constant currency basis, sales increased 40.8 percent.

Fiscal 2018 outlook reflect decline to flat sales growth

The company said, net sales are expected to be in the range of down 2 percent to flat and gross margin to be approximately 47.5 percent. Non-GAAP diluted earnings per share are expected to be in the range of 3.95 dollars to 4.15 dollars, which excludes any charges that may occur from additional store closures, restructuring and other charges.

The company expects second quarter fiscal 2018 net sales to be down approximately 10 percent versus the same period last year, primarily as a result of store closures, and the earlier than planned shipments in the first quarter. Non-GAAP diluted earnings per share is expected to be approximately 1 dollar to 1.05 dollars compared to 1.23 dollars for the same period last year.

Picture:Deckers Brands website

Deckers Brands