Shares of the parent company to Teva, Simple and Ugg hit a new 52-week high on Thursday before settling down to close at $6.92 on Friday, up 2.5% for the week. The surge was in response to a pretty solid second quarter report that saw sales increase 8.8% to $24.3 million and earnings that broke the $2.0 million mark after posting just north of $600K in profits in the year-ago period.
The quarter was helped by a half million dollar gift resulting from the reversal of a previously established accrual the company set up as part of a European anti-dumping action. DECK prevailed in the case and was able to reverse the accrual. Even without the reversal, Deckers would still have seen a 134% increase in Q2 earnings. Earnings were also positively impacted by the elimination of Teva royalty payments and the inclusion of a higher margin Internet and catalog business resulting from the Teva brand acquisition.
Gross margin benefited from the weaker dollar against the Euro and the acquired direct-to-consumer business.
Inventory grew $6.2 million, with $4.7 million (75.8%) of the gain coming from Ugg, $2.3 million (37.0%) from Teva and the balance from Simple. The company attributed the growth to earlier positions in Q3 goods and said they expected to have inventories back in line by the end of December.
DECK now sees full year sales in the $104 million to $108 million range and diluted EPS between 57 and 59 cents, up from the previous guidance of 50 to 53 cents. Full year Teva sales should be $70 million to $72 million, Simple sales to be $9 million to $10 million and Ugg sales to be $25 million to $26 million. Third quarter sales are seen in the $19 million to $20 million range with a loss of 4 to 5 cents loss per share.
>>> Sandals arent selling this year, eh???
