Deckers Outdoor Corporation (NASDAQ: DECK) today announced financial results for the second quarter ended June 30, 2013. Second Quarter Review
- Net sales decreased 2.5% to $170.1 million compared to $174.4 million for the same period last year.
- Gross margin was 41.1% compared to 42.2% for the same period last year.
- Diluted loss per share was $(0.85) compared to $(0.53) for the same period last year.
- UGG® brand sales decreased 6.9% to $100.4 million compared to $107.9 million for the same period last year.
- Teva® brand sales decreased 8.4% to $31.2 million compared to $34.1 million for the same period last year.
- Sanuk® brand sales increased 7.5% to $30.1 million compared to $28.0 million for the same period last year.
- Retail sales increased 29.1% to $32.5 million compared to $25.2 million for the same period last year; same store sales decreased 5.3% for the thirteen weeks ending June 30, 2013 compared to the thirteen weeks ending July 1, 2012.
- eCommerce sales increased 34.2% to $10.7 million compared to $8.0 million for the same period last year.
- Domestic sales decreased 3.0% to $110.1 million compared to $113.5 million for the same period last year.
- International sales decreased 1.6% to $60.0 million compared to $61.0 million for the same period last year.
Division SummaryUGG Brand UGG brand net sales for the second quarter decreased 6.9% to $100.4 million compared to $107.9 million for the same period last year. Higher global retail sales from new store openings and an increase in global eCommerce sales were offset by lower domestic and international wholesale sales, lower international distributor sales and a decrease in same store sales. Teva Brand Teva brand net sales for the second quarter decreased 8.4% to $31.2 million compared to $34.1 million for the same period last year. The decrease in sales was driven by lower domestic wholesale sales, partially offset by an increase in international distributor sales, and to a lesser extent gains in domestic eCommerce sales and international wholesale sales. Sanuk Brand Sanuk brand net sales for the second quarter increased 7.5% to $30.1 million compared to $28.0 million for the same period last year. The improvement in sales was driven primarily by an increase in domestic eCommerce sales combined with gains in domestic wholesale and international distributor sales and the launch of the brand in the Company’s European wholesale markets. Other Brands Combined net sales of the Company’s other brands increased 87.0% to $8.3 million for the second quarter compared to $4.5 million for the same period last year. The increase was primarily attributable to the addition of the HOKA ONE ONE® brand which was acquired in September 2012. Retail Stores Sales for the global retail store business, which are included in the brand sales numbers above, increased 29.1% to $32.5 million for the second quarter compared to $25.2 million for the same period last year. This increase was driven by 36 new stores opened after the second quarter of 2012, partially offset by a 5.3% same store sales decrease for the thirteen weeks ended June 30, 2013 compared to the thirteen weeks ending July 1, 2012.
eCommerceSales for the global eCommerce business, which are included in the brand sales numbers above, increased 34.2% to $10.7 million for the second quarter compared to $8.0 million for the same period last year. The sales increase was driven primarily by strong domestic and international sales for the UGG brand, increased domestic sales of the Sanuk brand, and the addition of new international eCommerce websites. Balance Sheet At June 30, 2013, cash and cash equivalents were $49.1 million compared to $114.4 million at June 30, 2012. The Company had $26.0 million in outstanding borrowings under its credit facility at June 30, 2013 and no outstanding borrowings at June 30, 2012. The decrease in cash and cash equivalents and increase in outstanding borrowings are primarily attributable to $120.7 million of cash payments for common stock repurchases and $64.5 million of cash expenditures primarily related to retail expansion and the Company’s new headquarters facility, partially offset by cash provided by operations. Inventories at June 30, 2013 increased 4.6% to $362.1 million from $346.3 million at June 30, 2012. By brand, UGG inventory increased $2.5 million to $311.4 million at June 30, 2013, Teva inventory increased $3.8 million to $24.9 million at June 30, 2013, Sanuk inventory increased $5.1 million to $14.4 million at June 30, 2013, and the other brands’ inventory increased $4.4 million to $11.4 million at June 30, 2013. “UGG inventory levels were higher than originally expected as of the end of June mostly due to timing, as certain fall deliveries were accelerated to accommodate factory requests in preparation for their peak production period in the second half of the year. This product will be utilized to fulfill early season demand at key wholesale accounts and will support our expanding direct to consumer channel which includes 36 more stores compared with this time a year ago. We are very comfortable with the quality of our current UGG brand inventory which consists almost entirely of core and in-line products. The sales headwinds for the Teva and Sanuk brands this spring also contributed slightly to the growth in our overall inventory position.”
Full-Year 2013 OutlookBased on results for the first six months of 2013 combined with higher projections for the Company’s direct to consumer channel driven by stronger eCommerce sales trends and the planned opening of approximately 36 new stores, up from its previous plan of approximately 30, the Company is raising its full year outlook.
- The Company now expects full year revenues to increase approximately 8% over 2012 levels, up from its previous projection of approximately 7%.
- The Company now expects full year diluted earnings per share to increase approximately 8% over 2012 levels, up from its previous projection of approximately 5%.
- The Company currently expects third quarter 2013 revenue to increase approximately 2.5% and diluted earnings per share to decrease approximately 41% from 2012 levels.
- The Company currently expects fourth quarter 2013 revenue to increase approximately 14.5% and diluted earnings per share to increase approximately 38% over 2012 levels.
You are cautioned not to place undue reliance on forward-looking statements contained in this press release, which speak only as of the date of this press release. You should read this press release with the understanding that our future results may be materially different from what we currently expect. We qualify all of our forward-looking statements by these cautionary statements and we expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof to conform such statements to actual results or to changes in our opinions or expectations, except as required by applicable law or the rules of the NASDAQ Stock Market.
|DECKERS OUTDOOR CORPORATIONAND SUBSIDIARIESCondensed Consolidated Balance Sheets(Unaudited)(Amounts in thousands)|
|June 30,||December 31,|
|Cash and cash equivalents||$||49,126||110,247|
|Trade accounts receivable, net||109,877||190,756|
|Other current assets||55,376||59,028|
|Income taxes receivable||22,899||-|
|Deferred tax assets||16,685||17,290|
|Total current assets||629,081||691,586|
|Property and equipment, net||142,135||125,370|
|Other intangible assets, net||93,040||95,965|
|Deferred tax assets||13,521||13,372|
|Liabilities and Stockholders' Equity|
|Trade accounts payable||169,220||133,457|
|Other accrued expenses||38,710||59,597|
|Income taxes payable||1,684||25,067|
|Total current liabilities||257,956||267,017|
|Deckers Outdoor Corporation stockholders' equity:|
|Additional paid-in capital||147,188||139,046|
|Accumulated other comprehensive loss||(1,843||)||(1,400||)|
|Total stockholders' equity||718,232||738,801|
|Total liabilities and equity||$||1,022,115||1,068,064|
|DECKERS OUTDOOR CORPORATIONAND SUBSIDIARIESCondensed Consolidated Statements of Comprehensive (Loss) Income(Unaudited)(Amounts in thousands, except for per share data)|
|Three-month period ended||Six-month period ended|
|June 30,||June 30,|
|Cost of sales||100,253||100,857||240,454||233,875|
|Selling, general and administrative expenses||112,583||102,287||233,490||203,642|
|Loss from operations||(42,751||)||(28,708||)||(40,099||)||(16,775||)|
|Other expense (income), net||301||(179||)||443||(580||)|
|Loss before income taxes||(43,052||)||(28,529||)||(40,542||)||(16,195||)|
|Income tax benefit||(13,777||)||(8,390||)||(12,274||)||(4,091||)|
|Other comprehensive (loss) income, net of tax|
|Unrealized (loss) gain on foreign currency hedging||(210||)||1,090||1,320||22|
|Foreign currency translation adjustment||(1,089||)||1,223||(1,763||)||1,961|
|Total other comprehensive (loss) income||(1,299||)||2,313||(443||)||1,983|
|Net (loss) income attributable to:|
|Deckers Outdoor Corporation||(29,275||)||(20,139||)||(28,268||)||(12,252||)|
|Comprehensive (loss) income attributable to:|
|Deckers Outdoor Corporation||(30,574||)||(17,826||)||(28,711||)||(10,269||)|
|Net loss per share attributable to Deckers|
|Outdoor Corporation common stockholders:|
|Weighted-average common shares outstanding:|