NEW YORK (TheStreet) - Deckers (DECK) shares were surging 14% in post-markets trading even as the UGG's maker's profits fell in the third quarter. Wall Street was expecting a larger drop in earnings.
The Goleta, Calif.-based company reported profit of $33 million, or 95 cents a share, a 23% decline compared to the same period a year ago. The decline wasn't as bad as analysts expected, easily surpassing an estimate of 72 cents a share.
Shares rose 13.6% to $66 in post-markets trading.
"The UGG brand has shown great resiliency over the past year driven by innovative new products and advancements in our marketing, merchandising and selling strategies," Chairman and CEO Angel Martinez said in the earnings statement."The fall selling season started well led by demand for our expanded collection of casual shoes and boots. As we move further into the back half of the year, sell-through of our core Classic and slipper collections is accelerating. We are pleased with our current business trends and believe the company is well positioned for the upcoming holiday period. More importantly, we believe the investments we are making in our brands, distribution platforms and supply chain will strengthen our growth profile and enhance our profitability over the long-term," Martinez said. Deckers' net sales rose 2.7% to $386.7 million compared to the same period last year and surpassed analysts' expectations of $385.9 million. Gross margin rose 90 basis points to 43.2% in the same time period. The company's UGG brand - its largest generator of sales rose 1.3% to $337 million year over year. Deckers also makes shoes under the Teva and Sanuk brands. Same-store sales rose 1.9% in the quarter, while the company's e-commerce platform saw double-digit increase of 12.2% to $14.9 million. The company is seeing solid progress in their international sales as well, up 10.3% to $147.9 million. Decker's raised its full-year outlook on earnings and revenue. It now expects a 10% increase in earnings per share over last year's earnings of $3.45 a share, compared to 8%. Wall Street was expecting earnings of $3.77 a share. However Deckers tempered expectations of fourth-quarter earnings. It now expects diluted earnings per share to increase approximately 32% over 2012 levels, compared to its previous projection of approximately 38%. -- Written by Laurie Kulikowski in New York.
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