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Home / Knowledge / News / Apparel/Garments / Deckers net sales up 20.3% to $209.7 million in Q1 FY18
Deckers net sales up 20.3% to $209.7 million in Q1 FY18
31
Jul '17
Net sales of Deckers Brands increased 20.3 per cent to $209.7 million in the first quarter of fiscal 2018, compared to $174.4 million for Q1 FY17. The YoY increase 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.

The gross margin of the company was 43.2 per cent in Q1 FY18, compared to $154.6 million last year. Gross margin was slightly better than expected, and included an 80 basis point headwind from changes in foreign currency exchange rates. SG&A expenses were $146.9 million compared to $154.6 million for the same period last year. The year-over-year improvement was primarily due to the result of the execution of cost savings plan. Non-GAAP SG&A expenses were $144.9 million.

UGG brand net sales for the first quarter increased 24.9 per cent to $114.7 million compared to $91.9 million for the same period last year. On a constant currency basis, sales increased 26.6 per cent. The increase in sales was driven by earlier than expected global wholesale shipments originally planned for the second quarter, and an increase in DTC comparable sales fuelled by strong sell through of new spring product, said the company in a press release.

Hoka One One brand net sales for the first quarter increased 74.2 per cent to $30.7 million compared to $17.6 million for the same period last year. On a constant currency basis, sales increased 75.3 per cent. The increase in sales was primarily driven by better than expected DTC and wholesale sales.

Teva brand net sales for the first quarter increased 8.6 per cent to $37.7 million compared to $34.7 million for the same period last year. On a constant currency basis, sales increased 9.8 per cent. The increase in sales was primarily driven by better global wholesale and DTC sales, as well as strong global reorder business.

Sanuk brand net sales for the first quarter were $26.2 million compared to $26.7 million for the same period last year, a decrease of 2 per cent on both a reported and constant currency basis. The decrease in sales was primarily driven by the transfer of a retail store to a partner at the end of the last fiscal year.

The company’s wholesale net sales for the first quarter increased 24.5 per cent to $144.6 million compared to $116.1 million for the same period last year. On a constant currency basis, sales increased 25.1 per cent. The increase in sales was driven by earlier than expected global shipments, and stronger than expected Hoka One One brand sales.

DTC net sales for the first quarter increased 11.8 per cent to $65.1 million compared to $58.3 million for the same period last year. On a constant currency basis, sales increased 14.3 per cent. DTC comparable sales for the first quarter increased 12.7 per cent over the same period last year.

Domestic net sales of Deckers Brands for the first quarter increased 10.2 per cent to $120.7 million compared to $109.5 million for the same period last year. International net sales for the first quarter increased 37.2 per cent to $89 million compared to $64.9 million for the same period last year. On a constant currency basis, sales increased 40.8 per cent, as per the company.

“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,” said Dave Powers, president and chief executive officer of Deckers Brands. “While it is still early in the year, we are encouraged by our recent top-line performance. Looking ahead, we believe the product, marketing and distribution strategies we have implemented across our brand portfolio, along with the anticipated benefits from our cost savings initiatives, have us well positioned to achieve the operating profit improvement targets we established for fiscal 2018 and longer-term.”

For fiscal 2018, the company’s net sales are expected to be in the range of down 2 per cent to flat. Gross margin is expected to be approximately 47.5 per cent and SG&A expenses as a percentage of sales are projected to be approximately 37 per cent. Non-GAAP diluted earnings per share are expected to be in the range of $3.95 to $4.15. This 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 per cent 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 to $1.05 compared to $1.23 for the same period last year. (KD)

Fibre2Fashion News Desk – India


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