Outdoor Boots Uk

Deckers Posts Loss; Ups Outlook

, The maker of sheepskin boots and slippers, recently delivered a loss per share in the second-quarter 2011 results owing to costs associated with the transition to a wholesale business model from a distributor business model, opening of new stores and other investments. Despite higher costs, Deckers projects an improved outlook for fiscal 2011 driven by the acquisition of the Sanuk brand.

The company has posted a quarterly loss per share of 19 cents, lower than the loss expectation of the Zacks Consensus Estimate of 24 cents. However, Deckers reported positive earnings of 23 cents in the prior-year quarter.

Let’s Dig Deep

Deckers said that total net sales jumped to $154.2 million, up 12.5% from the prior-year quarter, which came ahead of the Zacks Consensus Estimate of $143 million. The company’s robust growth in all its divisions and sustained focus on new product introductions along with geographic expansion have helped achieve increased growth.

Domestic sales for the quarter surged 26.9% to $82.8 million in the quarter. Sales also increased in the international wholesale channels as well as the consumer direct channels.

UGG brand net sales surged 8.0% to $108.3 million and Teva brand net sales grew 29.1% to $40.3 million. Combined net sales of Deckers’ other brands for the quarter were $5.7 million as against $5.6 million in the prior-year period. Sales for the retail store business jumped 102.2% to $20.1 million, propelled by same-store sales growth of 23.6%, and the opening of 11 new stores.

Sales for the company’s eCommerce business climbed 10.3% to $5.7 million, reflecting higher demand for the UGG brand.

Cost of goods sold increased 15.7% in the quarter under review which led to the rise in gross profit to $65.9 million from $60.7 million in the prior-year quarter. Gross profit margin was 42.7% in the second quarter of 2011 as opposed to 44.3% last year.

With the transition to a wholesale model, Deckers now manages the distribution of UGG, Teva and Simple brands in the U.K. and the UGG and Simple brands in the Benelux region. This will help capture incremental sales by selling directly to wholesale customers.

Other Financial Aspects

Deckers ended the quarter with cash and cash equivalents balance of $325.2 million, down 2.6%, which excludes the cash payment of $126.6 million associated with the acquisition of substantially all of the assets related to the Sanuk brand that closed on July 1, 2011.