Deckers posts sluggish start to fiscal year 2017

By

Obi Anyanwu

Published
Jul 29, 2016

Deckers Brands struggled in its first quarter of fiscal 2017 though President and CEO Dave Powers stated that the company is “encouraged” by the start.

 
“We remain on track to deliver the sales and profitability targets we established for the year,” Powers said. “Looking ahead, I am confident that our product lineup and marketing plans for this fall and holiday will help drive sales during our key selling season. I am excited about the progress we are making in this transitional year, and believe we are positioning the Company to capitalize on the opportunities in front of us.”
 
Deckers is in turnaround mode following the retirement of CEO Angel Martinez and appointment of Dave Powers in May. The company failed to reach last year’s numbers in several sectors and categories.

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Net sales decreased 18.4% to $174.4 million from $213.8 million in the previous first quarter. Operating loss was ($78.3) million versus ($63.7) million and diluted loss per share was ($1.84) compared to ($1.43) in the prior year.
 
UGG net sales decreased 19.8% to $91.9 million from $114.5 million, Teva declined 17.3% to $34.7 million compared to $41.9 million, Sanuk dropped 20.2% to $26.7 million versus $33.5 million in the prior year, and combined net sales of the company’s other brands decreased 11.6% to $21.1 million from $23.9 million.
 
Wholesale and distributor net sales dropped 24.3% to $116.1 million compared to $153.4 million in the previous first quarter, and direct-to-consumer net sales declined 3.6% to $58.3 million from $60.4 million.
 
Domestic net sales and international net sales decreased 18.6% and 18.2%, respectively, and international net sales decreased 19.1% on a constant currency basis.
 
For the second quarter, Deckers expects net sales to be up 1% to 3% and the diluted earnings per share to range from $1.12 to $1.22. For the full year, the company expects its net sales to be in the range of down 3% to flat.