Deckers Q2 revenue beats expectations, abandons sale
Despite declining net sales, Deckers Brands bottom line came in at $49.70 million, or $1.54 per share, for the second fiscal quarter ended September 30, 2017, and the company increased its outlook for the 2018 fiscal year.
For the second financial quarter of 2018, the outdoor shoe company announced on Thursday that net sales declined 0.7 percent to $482.5 million, compared to $485.9 million for the same period last year.
A huge part of that growth was driven by a 34.4 percent increase in net sales from Hoka One One. Similarly, Teva brand net sales also increased 24.9 percent to $21.4 million. Meanwhile, UGG brand net sales declined 2.9 percent to $400.4 million as did Sanuk brand net sales, which fell 19.3 percent to $15.2 million.
“I am very pleased with the progress we have made, and continue to make, executing on our operating profit improvement plan. Our goal remains to achieve an incremental $100 million of operating profit by the end of our fiscal year 2020, and operating margins of at least 13 percent by focusing on full-priced selling, driving supply chain efficiencies, implementing process improvements, reducing indirect spend, and closing retail stores that do not meet our financial objectives,” said Dave Powers, President and Chief Executive Officer.
International net sales for the second quarter increased 3.5 percent to $179.8 million, while domestic net sales for the second quarter decreased 3.1 percent to $302.7 million.
The company also announced on Thursday a new $335 million share repurchase program. Combined with the $65 million remaining under current authorization, the company now has the ability to repurchase a total of $400 million worth of shares.
“Beginning in April, our Board of Directors conducted a comprehensive process to understand the level of interest in an acquisition of the company. Although we are no longer actively pursuing a sale of Deckers, we remain open to considering strategic alternatives that would drive stockholder value,” said John Gibbons, Chairman of the Board.
The company expects third quarter fiscal 2018 net sales to be in the range of $735 million to $745 million.
Deckers now expects fiscal year 2018 net sales to be in the range of approximately 1 percent to 2 percent higher than last year. Gross margin is expected to be approximately 47.5 percent.
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