Deckers Outdoor Corporation saw fourth quarter net sales increase 56.2% to $194.2 million versus $124.4 million last year. Diluted EPS increased to $2.69 versus 95 cents on a GAAP basis. On a non-GAAP basis excluding the restatement adjustments of $0.3 million, or 2 cents per diluted share, and the impairment charge of $11.0 million, or 85 cents per diluted share, both incurred in the fourth quarter of fiscal 2006, fourth quarter 2007 diluted EPS increased 47.8% over last year.
Total domestic sales increased 54.9% to $177.7 million compared to $114.7 million in the prior year. Total international sales increased 71.1% to $16.5 million compared to $9.7 million last year.
Angel Martinez, president and CEO, stated, “Our record fourth quarter results, which underscore the growing popularity of the UGG Brand worldwide, represent a great way to end another strong year for Deckers. During fiscal 2007 we significantly increased sales and diluted earnings per share, consistently exceeded internal and external expectations, and ended the year with more than $168 million in cash, cash equivalents and short-term investments on our balance sheet. From a strategic standpoint, we further diversified the UGG Brand and expanded its selling season year round, repositioned the Teva® Brand as an outdoor, performance-oriented brand, and leveraged the Simple® Brands position as the leader in sustainable footwear into broader market opportunities. In addition, we expanded our international presence and grew our Consumer Direct business by opening two new retail stores and enhancing our websites. Looking ahead, we believe our growth prospects have never been more compelling, and we are confident that we will continue to take the right approach toward achieving our long-term objectives and creating value for our shareholders.”
UGG Brand net sales for the fourth quarter increased 61.8% to $177.7 million versus $109.9 million for the same period a year ago. Consumer demand for the entire womens fall line, including boots, slippers, casuals and the fashion collection, contributed to the UGG Brands better than expected performance. In addition, the expanded mens and kids offerings performed very well. For the full year, UGG Brand sales increased 64.4% to a record $347.6 million versus $211.5 million in 2006.
Teva Brand net sales for the fourth quarter increased 6.8% to $13.9 million compared to $13.0 million for the same period last year. This increase was primarily driven by solid sell-through of fall product. For the full year, Teva product sales increased 9.2% to $87.9 million compared to $80.5 million in the prior year.
Simple Brand net sales increased 76.2% to $2.6 million for the fourth quarter compared to $1.5 million for the same period last year. Simple product sales were fueled by strong sell-through of ecoSNEAKS throughout the fourth quarter. For the full year, the Simple Brands sales increased 8.2% to $13.5 million compared to $12.5 million a year ago.
Sales for the Consumer Direct business, which are included in the brand sales numbers above, increased 84.5% to $36.0 million for the fourth quarter compared to $19.5 million for the same period a year ago. This includes sales of $23.9 million from the companys eCommerce division and sales of $12.1 million from the companys seven retail stores. For the full year, sales for the Consumer Direct business increased 78.0% to $63.9 million compared to $35.9 million a year ago. This includes sales of $45.5 million from the companys eCommerce division and sales of $18.4 million from the companys seven retail stores.
Full-Year 2008 Outlook
Fiscal 2008 guidance includes approximately $8.8 million of stock compensation expense.
The company currently expects first quarter 2008 revenue to increase approximately 25% over 2007, and expects first quarter 2008 diluted earnings per share to be the same as or modestly higher than 2007. It is important to note that a significant portion of the companys operating expenses are fixed and spread evenly, on an absolute dollar basis, throughout each quarter. Therefore, the company expects earnings to grow at a slower rate during the first half of the year, which historically has included its lowest volume sales quarters.
|DECKERS OUTDOOR CORPORATION|
|Condensed Consolidated Statements of Income|
|(Amounts in thousands, except for per share data)|
|Three-month period ended||Year ended|
|December 31,||December 31,|
|Cost of sales||100,593||64,256||241,458||163,692|
|Selling, general and administrative expenses||36,693||23,305||101,918||73,989|
|Income from operations||56,957||21,515||105,553||51,442|
|Other (income) expense, net:|
|Interest expense and other, net||(412)||166||369||522|
|Income before income taxes||58,720||21,796||110,039||53,352|
|Net income per share:|