Deckers Brands Easily Tops Guidance In Q1

02 Aug Deckers Brands Easily Tops Guidance In Q1

Posted at 14:49h in Latest News by

Deckers Brands reported that revenues and its loss in the fiscal first quarter ended June 30 easily beat projected guidance. Sales grew 19.5 percent, led by a 17.6 percent gain for Ugg and a 53.1 percent hike at Hoka One One.

“Fiscal year 2019 is off to a solid start, with our first quarter revenue achieving a record high of $251 million and continuing the momentum we have built,” said Dave Powers, president and chief executive officer. “The Ugg Spring Summer and Hoka One One product offerings drove significant year-over-year sales growth, while Teva also produced solid gains. This quarter’s results are a testament that we are successfully progressing towards our long-term objectives and that our brands are well positioned in the marketplace.”

First Quarter Fiscal 2019 Financial Review

  • Net sales increased 19.5 percent to $250.6 million compared to $209.7 million for the same period last year. On a constant currency basis, net sales increased 17.6 percent.
  • Gross margin was 45.9 percent compared to 43.2 percent for the same period last year.
  • SG&A expenses were $154.4 million compared to $146.9 million for the same period last year. Non-GAAP SG&A expenses were $153.9 million this year compared to $144.9 million last year.
  • Operating loss was $39.4 million compared to an operating loss of $56.3 million for the same period last year.
  • Non-GAAP operating loss was $38.9 million this year compared to a loss of $54.3 million last year.
  • Diluted loss per share was $1.00 compared to a loss of $1.32 for the same period last year. Non-GAAP diluted loss per share was $0.98 this year compared to a loss of $1.28 last year.

Previously, Deckers had expected net sales to be in the range of $225.0 million to $235.0 million; a non-GAAP net loss per share is expected to be in the range of $$1.50 to $1.41.

Brand Summary

  • Ugg brand net sales for the first quarter increased 18.9 percent to $136.5 million compared to $114.7 million for the same period last year.
  • Hoka One One brand net sales for the first quarter increased 53.1 percent to $47.0 million compared to $30.7 million for the same period last year.
  • Teva brand net sales for the first quarter increased 6.2 percent to $40.0 million compared to $37.7 million for the same period last year.
  • Sanuk brand net sales for the first quarter decreased 6.6 percent to $24.4 million compared to $26.2 million for the same period last year.

Channel Summary 

  • Wholesale net sales for the first quarter increased 22.9 percent to $177.6 million compared to $144.6 million for the same period last year.
  • DTC net sales for the first quarter increased 12.0 percent to $73.0 million compared to $65.1 million for the same period last year.
  • DTC comparable sales for the first quarter increased 6.2 percent over the same period last year.

Geographic Summary

  • Domestic net sales for the first quarter increased 17.4 percent to $141.7 million compared to $120.7 million for the same period last year.
  • International net sales for the first quarter increased 22.3 percent to $108.9 million compared to $89.0 million for the same period last year.

Balance Sheet (June 30, 2018 as Compared to June 30, 2017)

  • Cash and cash equivalents were $417.9 million compared to $279.9 million.
  • Net inventories were $435.6 million compared to $441.6 million.
  • Outstanding borrowings were $31.9 million compared to $32.5 million.

Stock Repurchase Program

During the first quarter, the company repurchased approximately 86 thousand shares of its common stock for a total of $10 million. As of June 30, 2018, the company had $241 million remaining under its $400 million in stock repurchase authorizations.

Full Year Fiscal 2019 Outlook for the Twelve Month Period Ending March 31, 2019

  • Net sales are now expected to be in the range of $1.930 billion to $1.955 billion.
  • Gross margin expected to be slightly better than 49.0 percent.
  • SG&A expenses as a percentage of sales are projected to be slightly better than 36.5 percent.
  • Operating margin expected to be in the range of 12.6 percent to 12.8 percent.
  • Effective tax rate is expected to be approximately 22.0 percent.
  • Non-GAAP diluted earnings per share are now expected to be in the range of $6.25 to $6.45.
  • The earnings per share guidance excludes any charges that may occur from additional store closures, tax reform, organizational changes and other one-time or non-recurring charges. It also does not assume any impact from additional share repurchases.

Previously, Deckers expected sales to be in the range of $1.925 billion to $1.950 billion and non-GAAP diluted earnings per share are expected to be in the range of $6.20 to $6.40.

Second Quarter Fiscal 2019 Outlook for the Three Month Period Ending September 30, 2018

  • Net sales are expected to be in the range of $485.0 million to $495.0 million.
  • Non-GAAP diluted earnings per share are expected to be in the range of $1.60 to $1.70.
  • The earnings per share guidance excludes any charges that may occur from additional store closures, tax reform, organizational changes and other one-time or non-recurring charges. It also does not assume any impact from additional share repurchases.