Deckers stock slips as profits drop 59%
Unseasonably warm weather dampened first-quarter profits at Ugg boot maker Deckers Outdoor Corp and sent its share price tumbling more than 18 percent after the earnings announcement.
The Goleta-based footwear company reported April 26 that quarterly profits were down 59 percent to $7.9 million, or 20 cents per share. The earnings drop came even as revenue climbed 20 percent to $246.3 million.
“Our first quarter performance was mixed versus our expectations,” Deckers President and CEO Angel Martinez said in the earnings release. “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.”
Deckers said direct retail sales were up about 31 percent to $46.2 million. Online sales fell almost 8 percent to $21.7 million.
The company also lowered its full-year profit outlook and said it expects a second-quarter loss of 60 cents per share, citing rising costs for materials and the need to discount inventory to clear it out. Deckers forecast a drop in its earnings per share of 9 percent to 10 percent. It said it expects sales to climb 14 percent. Previously, it had expected earnings to remain flat and revenue to gain 15 percent this year.
Shares of Deckers dropped 18.2 percent to $56.83 in after-hours trading.