US: Deckers Q1 net profits slump on higher costs
Footwear company Deckers saw first-quarter net profits slump as higher costs hit margins.
The company, which owns the Ugg, Teva and Sanuk brands, saw net income fall 58.8% to US$7.8m over the quarter ended 31 March. Sales rose 20.2% to $246.3m.
Gross margin declined to 46% from 50% in the same period of the prior year, as SG&A expenses climbed to $101.3m from $74.2m in the same period of the prior year.
Ugg brand sales increased 6.5% to $158.1m, as Teva sales declined 1.1% to $49.8.
Domestic sales increased 15.1% to $170.6m, while international sales rose 33.5% to $75.7m.
"Our first quarter performance was mixed versus our expectations," said president, chairman and CEO Angel Martinez. "Sales growth was driven by the addition of the Sanuk brand combined with increased demand for the Ugg brand spring line, partially offset by softness in boots due to the unusually warm weather.
"The difference in the channel mix versus projections, along with some higher closeouts for the Teva brand and non-Classic Ugg brand styles, put some additional pressure on overall gross margins on top of the higher product costs we had forecasted."
"We'll soon be completing our fall booking process and we're encouraged by the level of domestic wholesale commitments for the Ugg brand collection to date particularly given the mild winter.
"While we believe that the macroeconomic conditions in Europe have created a difficult selling environment, we remain optimistic about our future prospects throughout the continent.
"Looking ahead, I have confidence that we can continue to successfully navigate through the near-term challenges facing some areas of our business, while continuing to execute against our strategic plan aimed at delivering consistent sales and earnings growth over the long-term."
Deckers Outdoor Corporation, the maker of Ugg boots and Teva sandals, has slashed its full-year forecasts after the introduction of higher ticket prices for its products led to a drop in third-quarter...
Deckers-owned sheepskin boots brand Ugg is set to open its first French store in Paris this week. ...
Footwear specialist Crocs has appointed Dale Bathum as chief product officer responsible for design and development, as well as expanding the brand internationally....
- 2014: Year in review - Sourcing winners and losers
- COMMENT: The decline of the buying office
- 2014: Year in review - Brand winners and losers
- 2014: Year in review - Retail winners and losers
- Bangladesh: The business benefits of compliance
- Report urges overhaul of Cambodia factory safety
- North Face debuts locally-grown "backyard" hoodie
- Bangladesh knitting worker killed by faulty lift
- Apparel manufacturing leads US reshoring trend
- Triumph recalls 22,000 bras for underwire fault