Deckers Outdoor raises fiscal 2008 growth targets
April 25, 2008 - United States Of America
Deckers Outdoor Corporation announced financial results for the first quarter ended March 31, 2008.
First Quarter Highlights:
• Net sales increased 34.4% to $97.5 million versus $72.6 million last year.
• Diluted EPS increased 17.8% to $0.86 versus $0.73 a year ago.
• Gross margin improved to 47.3% compared to 46.0% last year.
• UGG brand sales increased 83.6% to $54.8 million compared to $29.8 million a year ago.
Angel Martinez, President and Chief Executive Officer, stated, "We are very pleased with our first quarter performance which represents a solid start to fiscal 2008 in a challenging retail environment.
Our better than expected results continue to be driven by our UGG brand, as response was very positive to our expanded spring line of sandals, boots and slippers. With regard to Teva, sales were below plan primarily due to the difficult retail environment. That said, we continue to believe that our strategy to evolve Teva into an outdoor, performance-oriented brand and extend its selling season into the second half of the year remains on track.
For Simple, we witnessed strong sell-through with the new spring ecoSNEAKS and Green Toe collections across all channels of distribution, which underscores our belief that the sustainable lifestyle movement is resonating with consumers around the world. In addition, we have recently made a number of key infrastructure investments that we believe have strengthened our leadership team and better positioned our Company for long-term success."
UGG brand net sales for the first quarter increased 83.6% to $54.8 million compared to $29.8 million for the same period last year. The significant sales increase was attributable to strong domestic demand for the UGG brand coupled with greater distribution for the spring collection versus the same period a year ago.
Teva brand net sales decreased 2.6% to $37.7 million for the first quarter compared to $38.7 million for the same period last year. The modest decline in sales was the result of lower than expected consumer demand in a difficult retail environment, which impacted the level of projected reorders during the quarter.
Simple brand net sales for the first quarter increased 25.2% to $5.1 million compared to $4.0 million for the same period last year. Simple sales continued to benefit from heightened awareness and increased demand for the brand driven by innovative product offerings, a broader marketing and advertising effort and increased points of distribution.
Sales for the eCommerce business, which are included in the brand sales numbers above, increased 75.4% to 15.6 million for the first quarter compared to $8.9 million for the same period a year ago.
Sales for the retail store business, which are included in the brand sales numbers above, increased 145.4% to $5.3 million for the first quarter compared to $2.2 million for the same perioda year ago.
Full-Year 2008 Outlook:
• Based upon the Company's first quarter results coupled with improved visibility into the second half of the year, the Company currently expects its full year revenue to increase approximately 31% over 2007, up from previous guidance of approximately 25%.
• The Company currently expects its full year diluted earnings per share to increase approximately 27% over 2007, up from previous guidance of approximately 20%.
• Fiscal 2008 guidance includes approximately $8.8 million of stock compensation expense.
Second Quarter Outlook:
• The Company currently expects second quarter 2008 revenue and diluted earnings per share to increase approximately 50% and 30%, respectively, over 2007 levels.