Deckers Falls After Conservative Guidance, Quarterly Sales Up 21%

Scott Peters
28 Oct, 2022
New York City

Deckers Outdoor Corp dropped 3.8% to $345.35 after the footwear maker reported earnings ahead of expectations and reaffirmed its full-year outlook.

Revenue in the fiscal second quarter ending in September increased 21.3% to $875.6 million compared to $721.9 million.

Net sales on a constant currency basis jumped 24.8%.

Gross margin declined to 39.8% from 50.2% a year ago, after rising product and supply costs impacted negatively. 

Net income in the period declined to $101.5 million from $102.0 million and diluted earnings per share fell to $3.80 from $3.66 a year ago.

 

Regional Breakdown 

Domestic net sales increased 20.0% to $617.7 million from $514.6 million and International net sales advanced 24.4% to $257.9 million from $207.3 million a year ago.

 

Channel Sales 

Wholesale net sales rose 16.7% to $636.5 million from $545.2 million.  

Direct-to-Consumer or online net sales jumped 35.3% to $239.1 million from $176.7 million a year ago and comparable direct sales surged 38.2%. 

 

Segment Sales 

UGG brand net sales rose 6.3% to $476.5 million from $448.4 million a year ago. 

HOKA brand net sales jumped 58.3% to $333.0 million from $210.4 million.  

Teva brand net sales increased 4.3% to $30.1 million from $28.8 million. 

Sanuk brand net sales fell 25.2% to $7.5 million from $10.1 million.  

Other brands, including Koolaburra, net sales dropped 17.9% to $28.5 million from $24.2 million.

 

Strong Balance Sheet 

Inventories, including goods in transit, increased to  $925.0 million from $636.3 million a year ago. 

The company has no outstanding borrowings and cash and cash equivalents increased to  $419.3 million from $746.2 million a year ago. 

 

Fiscal Outlook 

The company forecasted revenue in full-year fiscal 2023 ending in March between $3.45 billion and $3.50 billion and diluted earnings per share between $17.50 and $18.35. 

Gross margin is estimated around 50.5%.

 

Stocks Repurchase Program 

During the second quarter, Deckers repurchased approximately 173,000 common stock for a total of $50.2 million at a weighted average price paid per share of $290.01. 

As of September 30, 2022, the company had approximately $1.5 billion available under its stock repurchase authorization.