Deckers Brands' - total revenues declined by 0.2 percent to $485.9 million in the second quarter of its financial year, ended Sept. 30. They were off by 0.3 percent in local currencies and lower than expected, mainly due to $6 million worth of orders being shipped late because of a shift to a third-party logistics provider in Europe.
The transfer caused Deckers' international sales to decline by 5.1 percent in constant currencies and by 6.3 percent in dollars, down to $301.6 million. Domestic sales climbed by 3.6 percent to $312.2 million.
Ugg's sales fell by 2.1 percent to $412.2 million in the quarter, and they were down by 1.6 percent on a currency-neutral basis.
Ugg's direct sales in Europe and those to international distributors were hurt by the change in logistics. There was also a drop in comparable store sales, but the management expressed confidence about the holiday season because of the response to Ugg's new Classic II range and stepped-up marketing efforts, which now include an educational component.
Among the group's other major brands, Teva saw its sales drop by 4.2 percent to $17.1 million, while Sanuk recovered with a 9.2 percent increase to $18.9 million, largely due to higher international sales. Hoka One One resumed its strong growth, rising by 39 percent in the quarter.
Like other companies operating in similar categories, Deckers lowered its forecast for the full financial year ending next March, predicting that they will decline by between 1.5 and 3 percent as its wholesale clients have cut back their orders because of last year's warm winter. The management was mainly referring to Ugg, which accounted for 85 percent of the turnover in the latest quarter.
The group's gross margin gained 0.5 percentage points and reached 44 percent. Reduced expenses contributed to raise Deckers' net profit for the quarter by 3 percent to $37.5 million.