Annual net income jumped by 33.4 percent to $42.5 million for Deckers Outdoor Corporation in 2006. The company’s gross margin went up by 430 basis points to 46.4 percent. The Simple and UGG brands registered strong growth for the group in the 12 months ended Dec. 31, 2006, as group sales grew by 15.0 percent to $304.4 million.
Turnover from UGG rose by 23.3 percent to $211.5 million, as investments in marketing for the brand were doubled on the year. Sales of Simple products jumped by 58.2 percent to $12.5 million. On the contrary, Teva’s sales dipped by 5.5 percent to $80.5 million, while Deckers worked to transform it from a brand of sandals to an outdoor-performance label.
In the 4th quarter, net turnover increased by 36.7 percent to $124.4 million, with consumer direct sales for all three brands up by 28.4 percent to $19.5 million. Sales outside of the USA for the three brands climbed by 47.3 percent to $9.7 million, while domestic sales rose by 35.9 percent to $114.7 million. Deckers ended 2006 with 34 distributors in 30 countries after restructuring its business outside of the USA during the year.
Teva’s sales for the quarter were up by 15.5 percent to $13.0 million, as the warm weather helped pull ahead sales of some Spring 2007 product. The brand also benefited from a solid sell-through from a limited introduction of Fall 2006 styles. The turnover of UGG increased by 40.1 percent to $109.9 million. Simple’s sales were up by 18.8 percent to $1.5 million in the quarter.
For 2007, Deckers expects both net sales and earnings to grow by about 15 percent. UGG and Teva sales are expected to rise in the mid-teens range, while Simple’s turnover is estimated to grow by 30 percent.