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Deckers Brands Q2 net sales drop, EPS rises to 1.54 dollars

By Prachi Singh

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Business

Deckers Brands second quarter net sales declined 0.7 percent to 482.5 million dollars compared to 485.9 million dollars for the same period last year. On a constant currency basis, net sales decreased 0.3 percent. Gross margin was 46.7 percent compared to 44.5 percent for the same period last year, while Operating income was 67.4 million compared dollars to 54 million dollars for the same period last year. Non-GAAP operating income was 67.8 million dollars. Diluted EPS was 1.54 dollars compared to 1.21 dollars last year, while non-GAAP diluted EPS was 1.54 dollars.

“Our goal remains to achieve an incremental 100 million dollars of operating profit by the end of our fiscal year 2020, and operating margins of at least 13 percent by focusing on full-priced selling, reducing indirect spend, and closing retail stores that do not meet our financial objectives,” said Deckers Dave Powers, President and Chief Executive Officer in a media statement, adding, “In light of our strong results and our confidence in the back half of the fiscal year, we are increasing our outlook for the year. We intend to aggressively repurchase our shares to reward our long-term shareholders with accelerated EPS growth.”

Deckers performance across its brands

UGG brand net sales for the second quarter declined 2.9 percent to 400.4 million dollars, Hoka One One brand net sales increased 34.4 percent to 40.6 million dollars, Teva brand net sales increased 24.9 percent to 21.4 million dollars and Sanuk brand net sales decreased 19.3percent to 15.2 million dollars.

Wholesale net sales declined 2.2 percent to 391.2 million dollars compared to 399.9 million dollars for the same period last year. DTC net sales increased 6.2 percent to 91.3 million dollars, while DTC comparable sales for the quarter increased 3.7 percent over the same period last year.

Domestic net sales decreased 3.1percent to 302.7 million dollars and international net sales increased 3.5 percent to 179.8 million dollars.

Deckers updates full year revenue guidance

The company now expects fiscal year 2018 net sales to increase in the range of up approximately 1 percent to up 2 percent versus last year. Gross margin is expected to be approximately 47.5 percent, non-GAAP diluted EPS is expected to be in the range of 4.15 to 4.30 dollars.

For the third quarter, the company expects net sales to be in the range of 735 million to 745.0 million dollars and non-GAAP diluted earnings per share to be in the range of 3.65 to 3.75 dollars.

Picture:Deckers Brands website

Deckers Brands