Net income down at Deckers Outdoor
Deckers Outdoor, a footwear and apparel company based in Goleta, declared $41.03 million in net income for its third quarter 2017, ended Dec. 31, down more than 73 percent from the third quarter of 2016.
For the first nine months of its fiscal year, the company earned $21.41 million, down from $145.97 million for the same period in 2016. Earnings per share fell from $4.47 per share during that time to 67 cents per share for the first three months of fiscal year 2017.
Net sales fell slightly from $795.9 million to $760.35 million but selling, general and administrative expenses rose 75 percent from $188.52 million to $330.38, quarter over quarter.
The company had cash and cash equivalents of $296.43 million and liabilities of $326.98 million as of Dec. 31, 2016.
Deckers’ UGG brand sales decreased 5.3 percent for the third quarter and its Sanuk products decreased 18.4 percent. Two of its smaller brands, Teva and Hoka One One, grew by 3.9 and 18.3 percent respectively.
Wholesale and distributor net sales decreased 12.5 percent on a constant currency basis, but direct to consumer sales rose 7.4 percent to $317.7 million for the quarter. Domestic sales decreased from $543.3 million to $489.5 million, while international sales rose 7.2 percent to $270.8 million.
“With the accelerated change that we are seeing in the marketplace, we plan to further transform our operating structure in order to grow profitably and become more nimble,” Dave Powers, president and CEO, said in the earnings release.
On a conference call to shareholders, Powers and Chief Financial Officer Thomas George highlighted the “urgency of the need to shift distribution strategy,” among other new strategies that included reaching younger customers, growing the men’s business, contraction to drive down costs and automation and consolidation at the manufacturing level.
The company is also looking to expand its international business and Hoka One One sales in North America, projecting around $90 million in savings over the next two years.
The company revised its outlook for the full fiscal year down to a 5 percent decline in net sales, year over year, and earnings per share of $3.45-$3.55.
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