Deckers Outdoor first quarter operating loss bigger than last year
Goleta-based Deckers Outdoor announced an operating loss of $78.3 million, a 23 percent increase over the same period last year, for its fiscal first quarter 2017, ended June 30.
Diluted losses per share rose from $1.43 to $1.84 year-over-year due to decreases in sales across its Ugg, Teva and Sanuk brands.
The timing of order shipments resulted in a net sales drop of more than 18 percent. The $174.4 million in sales, down from $213.8 million the prior year, also reflected a decrease in direct-to-consumer and closeout sales in both the domestic and international markets.
“We are encouraged by our start to fiscal 2017, and we remain on track to deliver the sales and profitability targets we established for the year,” President and CEO Dave Powers said in a statement. “Looking ahead, I am confident that our product lineup and marketing plans for this fall and holiday will help drive sales during our key selling season.”
The company is taking action to be less reliant on weather and diversify products to be “so compelling that it doesn’t matter what the weather looks like outside,” Chief Financial Officer Thomas George said in the earnings call. Deckers remains committed to its core brands but sees increased interest in rain boots and sneakers for men and anticipates introducing more fashion.
The company ended the quarter with cash and cash equivalents of $202.3 million, up from $168.7 million last year, and outstanding borrowings increased to $110.6 million from $43.4 million. Its inventories increase 25.6 percent across its brands, due to continued warm weather.
Deckers is still taking a conservative approach and outlook for the fall and holiday seasons, George said. Financial statements repeated expectations to end the 2017 fiscal year with net sales flat to 3 percent down. It expects increased net sales for the second fiscal quarter, ending Sept. 30, before its busier third and fourth quarters.
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