Motivated by continued strong demand for its Ugg brand in the U.S. and abroad, Deckers Outdoor Corporation slightly adjusted its full-year outlook upward as it reported results for the first quarter. The company is now forecasting group revenues for the full fiscal year to grow by 7-9 percent, compared with prior guidance of 6-9 percent. The company expects sales to grow by 10 percent in the second quarter, though typically that is Deckers’ slowest period.
In the first quarter, the group’s net income grew by 9 percent to $12.3 million as revenues jumped by 38 percent $134.2 million. By brand, Ugg’s sales were 67 percent higher at $91.4 million; Teva fell by 6 percent to $35.6 million; Simple was off by 13 percent to $4.4 million and other brands (Tsubo, Ahnu) generated $2.9 million in revenue.
By region, sales in the U.S. home market rose by 30 percent to $102.0 million, while sales outside the domestic market were up by 71 percent to $32.2 million. Deckers’ e-commerce business generated a 3.5 percent increase to $16.2 million and sales though the company’s own retail stores were 162 percent higher at $13.9 million with comparable store sales up by 29 percent.
The Teva business was negatively impacted by three regional bankruptcies in the U.S. although the management saw some encouraging sell-through signs in early April, while the Simple business had a “more challenging” business than predicted with a higher level of U.S. cancellations and lower sales in Europe and Japan.
Among its smaller brands, Deckers has decided to slash by half a planned $10 million increase in marketing expenditures for Simple and Tsubo. The Tsubo brand is going to be re-launched in the autumn.