• Q4 profit jumps 40% to $124.7m from $89.2m
  • Net sales increased 40.4% to $603.9m
  • Ugg brand sales up 37.7% to $568.5m

The continued strength of its Ugg brand over the holidays has helped Deckers Outdoor Corporation to a 40% hike in fourth quarter profit, but the footwear firm also warned of "significant cost headwinds" in the year ahead due to soaring sheepskin prices.

In its forecast for 2012, Deckers sees earnings flat with the year before, and revenue growth of 15%. While for the first quarter it expects a 50% drop in earnings and a jump of 19% in revenues.

"We continue to pursue all available opportunities to further mitigate the impact of cost pressures and based on our initial visibility, we expect to experience relief beginning in 2013," said chairman and CEO Angel Martinez.

He added that top-line growth, including a higher contribution from the Sanuk action sport and footwear brand acquired last July, will help offset the higher costs.

During the quarter to 31 December, the company posted a profit of $124.7m or $3.18 per share, up from $89.2m or $2.27 per share, in the same period last year - the highest in its history.

Net sales increased 40.4% to $603.9m, with Ugg brand sales up 37.7% to $568.5m and the Teva brand climbing 45.9% to $19.4m. Retail sales were up 36.5% to $98.8, international sales surged 178.6% to $147.6m, and domestic sales increased 21.0% to $456.3m.

But quarterly gross margin fell to 51.0% compared to 54.2% for the same period last year.

During the year, profit rose 25.9% to $199.1m or $5.07 per share, from $158.2m or $4.03 per share the year before. Net sales increased 37.6% to $1.377bn, with the Ugg brand up 37.6% to $1.2bn, and Teva climbing 23.1% to $124.8m.