Deckers Of UGG Parent Company Turns Losses Into Profits

Thanks to the growth of its brand sales across the board, UGG parent Deckers Outdoor Corp. (NYSE:DECK) lost its profits in the fourth quarter, but the group's expectations for the first quarter of the 2016 fiscal year were worse than market expectations.

Driven by the increase in UGG sales from 2/3 close to the business of 9.7% to 216 million 800 thousand US dollars, the Deckers Outdoor Corp.'s revenue in the fourth quarter ended March 31st increased by 15.6% to 340 million 600 thousand US dollars, which is better than the 321 million 600 thousand US dollar forecast and the 19.1% increase after the exchange rate.

However, the growth of UGG was mainly contributed by the increase of wholesale distribution revenue and the sales of new stores. The same store sales actually declined compared with the same period last year, resulting in a 6.5% decline in the group's same store sales.

Teva, Sanuk and other brand portfolios have double-digit sales growth.

By channel, wholesale distribution and direct sales to consumer channels increased by 16.6% and 14.1% to 205 million 100 thousand US dollars and 135 million 500 thousand US dollars respectively.

According to the market, sales in the US market increased by 9.8% to 217 million 700 thousand dollars.

It rises from 27.5% to 122 million 900 thousand dollars.

Fourth quarter group achieved net profit of $1 million 406 thousand, the same period last year.

2 million 685 thousand US dollars, diluted earnings per share increased from US $-0.08 in the same period last year to US $0.04, and the market is expected to be US $0.

The gross profit margin was 44.7%, a 420 basis point drop from 48.9% in the same period last year, of which 160 base points were caused by the appreciation of the US dollar, and 260 basis points were attributed to the delay in the west coast port and the handling of the Tsubo brand inventory that is being sought.

In the 2015 fiscal year, the total revenue of Deckers Outdoor Corp. totaled $1 billion 817 million 100 thousand, an increase of 14.5% compared with the 1 billion 587 million 600 thousand in the 2014 fiscal year, of which UGG sales increased 12.6% to 1 billion 490 million dollars.

And Sanuk increased by 13.5% and 13.1% to $126 million 700 thousand and $114 million 700 thousand respectively, while other brands increased by 69.5% to 82 million 400 thousand US dollars.

Net profit was 13.9% higher than the previous year's $142 million, and the diluted earnings per share rose from $4.07 to $4.66.

By the end of the year, group inventories increased by 12.9% to 238 million 900 thousand US dollars annually, UGG increased 11%, Teva fell 19.9% and Sanuk increased 93.2%.

Deckers Outdoor Corp. expects the share loss in the first quarter of fiscal year 2016 to expand from $1.07 a year ago to $1.52, much higher than the $1.17 expected by the market, and the revenue is expected to be unchanged from a year ago, with the market expected to grow 8% to 227 million 700 thousand US dollars over the same period.

As for the 2016 fiscal year, excluding the impact of the exchange rate, it is expected to achieve earnings of $5.60 per share, far more than the market forecast of $5.05, and the income target of $2 billion 10 million is also higher than the market forecast of $1 billion 950 million.