UGG Helps Deckers’ Q3 Sales Increase 52.5%

Deckers Outdoor Corporation saw net sales for the third quarter ended Sept. 30, 2008 increase 52.5% to $197.3 million versus $129.4 million last year. Diluted EPS for the quarter increased 34.0% to $1.97 versus $1.47 a year ago. Domestic sales increased 40.9% to $162.3 million compared to $115.2 million last year, while international sales increased 146.7% to $35.0 million versus $14.2 million a year ago.

“Our record third quarter performance was fueled primarily by the growing global demand for our diversified line of UGG footwear products,” said President, CEO and chairman of the board of directors Angel Martinez. “We continue to see robust full price selling for our UGG brand throughout our retail account base which is particularly rewarding given the difficult macroeconomic environment and further underscores the strength of the brand. We were also pleased with the results from our Teva brand’s first truly complete fall performance and lifestyle line of closed-toe footwear as consumers responded positively to several new styles from the collection. Meanwhile, our Simple brand’s performance was highlighted by the growing popularity of ecoSNEAKS which is benefiting from broader distribution and better placement at retail. In addition, the recent launch of PlanetWalkers contributed nicely to the brand’s overall results. Looking ahead, we remain optimistic about our future prospects, reflected in both our heightened outlook for the remainder of 2008 and our recently raised long-term growth target of $1 billion in sales by 2012.”

Division Summary

UGG

UGG brand net sales for the third quarter increased 57.1% to $178.7 million compared to $113.7 million for the same period last year. The significant year-over-year improvement was driven by increased orders for the expanded fall line from domestic retailers coupled with higher shipments to international distributors.

Teva

Teva brand net sales were $11.2 million for the third quarter, the same as last year over the same period. Consumer demand for new fall closed-toe product was offset by declines in core sandal sales.

Simple

Simple brand net sales for the third quarter increased 16.6% to $5.2 million compared to $4.4 million for the same period last year. The increase was driven by strong retail sell-through of ecoSNEAKS combined with the launch of PlanetWalkers that began at the end of the second quarter of 2008.

TSUBO

TSUBO was acquired in the second quarter of 2008. TSUBO brand net sales were $2.2 million in the third quarter.

eCommerce

Sales for the eCommerce business, which are included in the brand sales numbers above, increased 36.0% to $10.6 million for the third quarter compared to $7.8 million for the same period a year ago.

Retail Stores

Sales for the retail store business, which are included in the brand sales numbers above, increased 92.3% to $5.4 million for the third quarter compared to $2.8 million for the same period a year ago.

Full-Year 2008 Outlook

* Based upon the company’s better-than-expected third quarter results coupled with its increased expectation for the fourth quarter, the company currently expects its full year revenue to increase approximately 52% over 2007, up from previous guidance of approximately 43%.
* The company currently expects its full year diluted earnings per share to increase approximately 40% over 2007, up from previous guidance of approximately 34%.
* Fiscal 2008 guidance includes approximately $10.5 million of stock compensation expense, compared to $6.6 million in 2007.

Fourth Quarter Outlook

* Deckers is increasing its fourth quarter 2008 revenue growth target to approximately 52% and its diluted earnings per share growth target to approximately 44%, each as compared to the fourth quarter of 2007. This is up from its previous revenue and diluted earnings per share growth targets of 45% and 42%, respectively.