Deckers sees sales and profits slip in Q4
Goleta, California-based footwear, accessories and apparel company Deckers Brands announced declines in its fourth-quarter sales and earnings on Thursday, a disappointing conclusion to an otherwise strong year.
For the fourth quarter ended March 31, 2020, the group’s net sales totaled $374.9 million, decreasing 4.9% (4.5% in constant currencies) from $394.1 million in the prior-year period.
Due to the Covid-19 pandemic, Deckers’ stores in Europe and North America have been closed since March 17, negatively impacting the company’s overall revenues. However, the effects of these closures should be more noticeable in the group’s results for the first quarter of 2021, which includes April and May.
Ugg, Deckers’ largest brand, saw its Q4 sales fall 17.9% from $239.0 million to $196.3 million, while casual footwear brand Sanuk posted a 57.8% decline in its revenues, which totaled $13.3 million, down from $31.5 million in the same period in the previous year.
Popular running shoe brand Hoka One One, on the other hand, continued to make progress in the quarter, reporting sales of $101.9 million, an impressive 51.8% rise compared to $67.1 million in Q4 2019. The Teva sport sandal brand also posted a 12.5% increase in sales, from $52.9 million to $59.6 million.
Both the company’s wholesale and DTC channels saw quarterly sales declines, of 2.9% and 7.9%, respectively. Domestic sales fell 8.4%, while international sales managed a 1.4% rise.
Deckers’ net income for the quarter came to $16.1 million, or $0.57 per diluted share, compared to $24.0 million, or $0.82 per diluted share, in the prior-year period.
For the full fiscal year 2020, the company reported net sales of $2.133 billion, up 5.6% (6.5% in constant currencies) from $2.020 billion in fiscal 2019. Annual net income was $276.1 million, or $9.62 per diluted share, compared to $264.3 million, or $8.84 per diluted share.
“Fiscal year 2020 performance was driven by the strength of our brand portfolio, fueled by targeted investments in our key initiatives, coupled with disciplined financial management,” commented Deckers president and CEO Dave Powers in a release. “We expect fiscal year 2021 results to be impacted depending on the duration and severity of the Covid-19 pandemic, but our in-demand brands, omni-channel capabilities, and healthy balance sheet position us well to weather this challenging environment.”
The majority of the temporary store closures implemented by Deckers in March remain in effect, and the company has also furloughed a portion of its retail associates.
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