Deckers Outdoor Corporation, which recently changed its fiscal year-end to March, has raised its outlook for sales and earnings in the current financial year after reporting a 24.3 percent boost in total revenues to $211.5 million for its first quarter ended on June 30. All its main brands contributed to the growth, fueled by the introduction of new products and the roll-out of an omni-channel retail strategy.
The group's own retail sales increased by 29.2 percent to $42.0 million through the opening of new single-brand stores and new websites in the U.S. and abroad. A Retail Inventory Online system, launched in the U.S. and Europe this spring, allows customers to check the inventory in a store before visiting it. In both territories, customers will be able to order products online and pick them up at the stores.
The group's total sales outside the U.S. rose by 32.0 percent to $79.2 million.
Ugg Australia posted a 22.8 percent sales increase to $123.3 million. Teva's sales rose by 25.7 percent to $39.3 million, and those of Sanuk grew by 19.6 percent to $36.0 million.
Ugg suffered a contraction in same-store sales at its own retail operations, but posted strong increases at wholesale and with foreign distributors, who posted higher orders for its expanded range of transitional styles.
The long winter in the U.S. pushed up sales of Ugg's specialty classics, slippers and fashion boots. On the other hand, retailers are responding well to the brand's updated styling, expanded ranges for more than one season, and better price points.
Ugg launched a few weeks ago a new collection of premium street and lounge shoes, I-Heart-Ugg, targeting girls between the ages of nine and 13 years. The autumn/winter line will be available in the U.S. at Ugg's stores in San Francisco and Waikiki and at Zappos, Nordstrom and Dillards. The distribution will be widened to Europe next spring.
Both Teva and Sanuk are being transformed into lifestyle brands with a broader appeal instead of being strictly associated with the outdoor or action sports. Higher revenues from foreign distributors and wholesale customers contributed to the good performance of both brands in the latest quarter.
Deckers' Other Brands segment saw its sales jump by 54.5 percent to $12.9 million, due primarily to a $4.5 million increase for the Hoka One One brand of trail running shoes.
The group's gross margin remained essentially flat at 41.1 percent, due to a higher proportion of sales to international distributors. The company moved to an operating loss of $50.5 million from a $42.8 million loss in the year-ago period, and its net loss increased by 26.6 percent to $37.1 million for this seasonally weak quarter.
For the full financial year through March 2015, sales are predicted to go up by about 14 percent with increases of 12 percent for Ugg, 11 percent for Teva and 15 percent for Sanuk. Earnings per share should inflate by 14.5 percent, up from a previous forecast of 13.5 percent growth. More in SGI Europe and The Outdoor Industry Compass.