Deckers Outdoor Corp. saw a 57.2% jump in third
quarter sales to $129.4 million from $82.3 million last year. Diluted
EPS increased 81.5% to $1.47 from 81 cents, as restated, and ahead of
previous guidance of approximately $1.20. UGG sales increased 67.5% to
$113.7 million; Teva's increased 12.1% to $11.2 million. Simple sales
were flat at $4.4 million.
strong full price selling of UGG brand product throughout the United
States coupled with growing demand for the brand overseas. Consumer
reaction to the UGG brands fall line has been extremely favorable
which we believe underscores the progress we have made evolving the
product offering, increasing the breadth and depth of each collection
and enhancing the brands image as the leader in luxury comfort. In
addition, our success at penetrating new geographic regions, increasing
shelf space and broadening our target market also contributed to our
better than expected results. We move forward with positive momentum in
our business, a solid infrastructure to support our growth objectives
both domestically and overseas, and a long-term strategic development
plan designed to maximize the opportunities for each of our leading
brands.”
Segment Summary
UGG
UGG Brand net sales for the third quarter increased
67.5% to $113.7 million compared to $67.9 million in the third quarter
of 2006. Domestic sales were fueled by robust consumer demand for the
entire product line, including boots, slippers, casuals, mens, kids,
and the new high-end fashion collection, coupled with strong
international growth.
Teva
Teva Brand net sales for the third quarter increased
12.1% to $11.2 million compared to $10.0 million for the same period
last year. Tevas results were driven by increased sell-through for
sandals as well as the positive reaction to the brands expanded
closed-toe product offering.
Simple
Simple Brand net sales were $4.4 million for both
the third quarter of 2007 and the third quarter of 2006. Simples
performance was negatively impacted by shipping delays for ecoSNEAKS as
a result of production issues, which have been resolved. Despite this,
ecoSNEAKS was said to have had a “very solid debut” across multiple
channels of distribution, while Green Toe was successful in opening
more mainstream accounts this fall.
Consumer Direct
Sales for the Consumer Direct business, which are
included in the brand sales numbers above, increased 82.3% to $10.6
million compared to $5.8 million for the same period a year ago, mostly
due to an increase in UGG Brand internet sales. In addition, results
for the third quarter of 2007 included sales from the companys UGG
Brand flagship store in New York City and two retail outlet stores in
Riverhead and Woodbury Common, New York, which were not in operation in
the third quarter of 2006.
Full-Year 2007 Outlook
The company is increasing its 2007 full year revenue
growth target to approximately 39% over 2006, up from previous guidance
of approximately 35%.
The company is increasing its 2007 full year diluted
earnings per share growth target to approximately 35% over 2006 before
the restatement adjustments as disclosed in the companys Form 10-K/A
for the year ended December 31, 2006 and the $15.3 million pre-tax
impairment loss attributable to our Teva trademark that was recorded in
the fourth quarter of 2006, up from previous guidance of approximately
25%.
million of stock compensation expense, an increase of $3.2 million over
2006, and approximately $2.4 million of expenses related to the
investigation and restatement of the companys consolidated financial
statements.
Fourth Quarter Outlook
2007 revenue target to approximately 35% and its diluted earnings per
share target to approximately 15% compared to the fourth quarter of
2006, before the restatement adjustment and impairment charge. This is
up from its previous revenue and diluted earnings per share growth
targets of 30% and 10%, respectively.
|
DECKERS OUTDOOR CORPORATION |
||||||||||||||
|
AND SUBSIDIARIES |
||||||||||||||
|
Condensed Consolidated Statements of Income |
||||||||||||||
|
(Unaudited) |
||||||||||||||
|
(Amounts in thousands, except for per share data) |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
Three-month period ended |
|
|
Nine-month period ended |
|
|||||||
|
|
|
|
September 30, |
|
|
September 30, |
|
|||||||
|
|
|
|
2007 |
|
2006 |
|
|
|
2007 |
|
2006 |
|
||
|
|
|
|
|
|
As Restated |
|
|
|
|
|
As Restated |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Net sales |
|
$ |
129,381 |
|
|
82,322 |
|
|
$ |
254,686 |
|
|
180,047 |
|
|
Cost of sales |
|
|
70,666 |
|
|
45,266 |
|
|
|
140,865 |
|
|
99,436 |
|
|
Gross profit |
|
|
58,715 |
|
|
37,056 |
|
|
|
113,821 |
|
|
80,611 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Selling, general and administrative expenses |
|
|
28,055 |
|
|
19,865 |
|
|
|
65,225 |
|
|
50,684 |
|
|
Income from operations |
|
|
30,660 |
|
|
17,191 |
|
|
|
48,596 |
|
|
29,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Other (income) expense, net: |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Interest income |
|
|
(851 |
) |
|
(688 |
) |
|
|
(3,504 |
) |
|
(1,985 |
) |
|
Interest and other expense, net |
|
|
207 |
|
|
163 |
|
|
|
781 |
|
|
356 |
|
|
Income before income taxes |
|
|
31,304 |
|
|
17,716 |
|
|
|
51,319 |
|
|
31,556 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Income taxes |
|
|
11,974 |
|
|
7,336 |
|
|
|
20,271 |
|
|
13,178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Net income |
|
$ |
19,330 |
|
|
10,380 |
|
|
$ |
31,048 |
|
|
18,378 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Basic |
|
$ |
1.49 |
|
|
0.83 |
|
|
$ |
2.43 |
|
|
1.47 |
|
|
Diluted |
|
|
||||||||||||
