US apparel and footwear group Deckers Brands has upped its guidance for the full year on the back of better than expected sales and earnings per share in the second quarter.
The maker of Ugg footwear says that for the three months ended 30 September, net income totalled US$74.4m, compared to $49.6m a year earlier. Gross margin was 50.2% compared to 46.7% for the same period last year.
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Diluted earnings per share was $2.48 compared to $1.54 for the same period last year. Non-GAAP diluted earnings per share was $2.38 this year compared to $1.54 last year.
Net sales, meanwhile, increased 4% to $501.9m from $482.5m in the year-ago period. On a constant currency basis, net sales climbed 3.3%.
Domestic net sales for the quarter increased 2.9% to $311.6m, while international sales climbed 5.9% to $190.3m.
Ugg brand net sales slipped 1% in the period to $396.3m, compared to $400.4m a year ago, while Teva brand net revenues edged up 0.6% to $21.5m. Meanwhile, net sales for the Sanuk brand fell 9.4% to $13.8m from $15.2m last year. Hoka One One sales, however, surged 28.4% to $52.1m.
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By GlobalData“The continued profitability gains in the Ugg brand and top-line growth within the Hoka One One brand drove second-quarter results, as both sales and earnings per share exceeded expectations,” says CEO Dave Powers. “Profitability in the second quarter was aided by a 350 basis point increase in gross margin over last year. While a portion of the increase in gross margin came from one-time savings in the quarter, the company continues to execute well on our long-term plan of improving levels of profitability.”
Powers adds Deckers’ confidence in its strategy, coupled with the momentum it sees in the business and the strength of the brand portfolio has led it to raise its fiscal year 2019 guidance.
The firm now expects full-year fiscal 2019 net sales in the range of $1.94bn and $1.96bn, while gross margin is expected to be about 50%. Non-GAAP diluted earnings per share are expected to be in the range of $6.65 to $6.85, compared to the $6.25 to $6.45 guidance provided in July.
