US apparel and footwear group Deckers Brands – which reportedly received a sale ultimatum earlier this month – narrowed its net loss in the first quarter, and said its ongoing savings plan has it well-positioned to achieve its fiscal 2018 and longer-term targets.

The maker of Ugg footwear says that for the three months ended 30 June, losses narrowed to US$42.1m from $58.9m a year earlier. Gross margin was slightly better than expected at 43.2% compared to 43.7% for the same period last year, despite an 80 basis point headwind from changes in foreign currency exchange rates.

Net sales were also up, rising 20.3% to $209.7m compared to $174.4m for the same period last year. Domestic net sales for the quarter increased 10.2% to $120.7m, while international sales were up 37.2% to $89m.

Ugg brand net sales increased 24.9% to $114.7m, compared to $91.9m a year ago, while Teva brand net revenues were also up, climbing 8.6% to $37.7m. Meanwhile, net sales for the Sanuk brand slipped 2% to $26.2m, compared to $26.7m last year.

"Our first quarter results reflect solid consumer demand for our spring product offering across our brands combined with earlier than planned shipments of certain fall orders," said CEO Dave Powers. "While it is still early in the year, we are encouraged by our recent top-line performance. Looking ahead, we believe the product, marketing and distribution strategies we've implemented across our brand portfolio, along with the anticipated benefits from our cost savings initiatives, have us well positioned to achieve the operating profit improvement targets we established for fiscal 2018 and longer-term."

Deckers says its outlook for fiscal year 2018 remains unchanged with net sales expected to be in the range of down 2% to flat, gross margin at 47.5%, and non-GAAP diluted earnings per share in the range of $3.95 to $4.15.

Earlier this month, reports suggested Marcato Capital Management, which reportedly owns 6% of Deckers, issued an ultimatum that if Decker's strategic review process does not lead to a sale, it will replace the board in its entirety.

Deckers receives sale ultimatum?