Deckers Outdoor Corporation (NASDAQ:DECK), a global leader in designing, marketing, and distributing innovative footwear, apparel and accessories, today announced financial results for the third quarter ended September 30, 2013. Third Quarter Review
- Net sales increased 2.7% to $386.7 million compared to $376.4 million for the same period last year.
- Gross margin improved 90 basis points to 43.2% compared to 42.3% for the same period last year.
- SG&A expenses as a percent of net sales were 31.1% compared to 26.5% for the same period last year.
- Diluted earnings per share was $0.95 compared to $1.18 for the same period last year.
- UGG® brand sales increased 1.3% to $337.0 million compared to $332.8 million for the same period last year.
- Teva® brand sales increased 0.6% to $18.0 million compared to $17.9 million for the same period last year.
- Sanuk® brand sales increased 0.5% to $18.4 million compared to $18.3 million for the same period last year.
- Retail sales increased 34.5% to $52.6 million compared to $39.1 million for the same period last year; same store sales increased 1.9% for the thirteen weeks ending September 29, 2013 compared to the thirteen weeks ending September 30, 2012.
- eCommerce sales increased 12.2% to $14.9 million compared to $13.3 million for the same period last year.
- Domestic sales decreased 1.4% to $238.8 million compared to $242.2 million for the same period last year.
- International sales increased 10.3% to $147.9 million compared to $134.2 million for the same period last year.
Division SummaryUGG Brand UGG brand net sales for the third quarter increased 1.3% to $337.0 million compared to $332.8 million for the same period last year. The increase in sales was primarily driven by higher global Direct to Consumer sales, resulting from new store openings and the launch of new eCommerce websites, partially offset by lower domestic wholesale sales. Teva Brand Teva brand net sales for the third quarter increased 0.6% to $18.0 million compared to $17.9 million for the same period last year. The increase in sales was driven by higher worldwide wholesale and Direct to Consumer sales, partially offset by a decrease in international distributor sales. Sanuk Brand Sanuk brand net sales for the third quarter increased 0.5% to $18.4 million compared to $18.3 million for the same period last year. The increase in sales was driven primarily by gains in worldwide wholesale sales, as well as an increase in domestic Direct to Consumer sales, offset by a decrease in distributor sales primarily in the Asia Pacific region, as well as in Canada. Other Brands Combined net sales of the Company’s other brands increased 81.3% to $13.3 million for the third quarter compared to $7.3 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 34.5% to $52.6 million for the third quarter compared to $39.1 million for the same period last year. This increase was driven by 37 new stores opened after the third quarter of 2012, and a 1.9% same store sales increase for the thirteen weeks ended September 29, 2013 compared to the thirteen weeks ending September 30, 2012.
eCommerceSales for the global eCommerce business, which are included in the brand sales numbers above, increased 12.2% to $14.9 million for the third quarter compared to $13.3 million for the same period last year. The sales increase was driven primarily by strong international sales for the UGG brand, and the addition of new international eCommerce websites. Balance Sheet At September 30, 2013, cash and cash equivalents were $84.1 million compared to $61.6 million at September 30, 2012. The Company had $245.5 million in outstanding borrowings under its credit facility at September 30, 2013 and $275.0 million at September 30, 2012. The increase in cash and cash equivalents and decrease in outstanding borrowings are primarily attributable to improved inventories and cash provided by operations, partially offset by $75.2 million of cash payments for capital assets primarily related to retail expansion and the Company’s new headquarters facility, and also $36.0 million of cash payments for common stock repurchases made in the fourth quarter 2012. Inventories at September 30, 2013 decreased 8.6% to $444.6 million from $486.2 million at September 30, 2012. By brand, UGG inventory decreased $52.7 million to $399.1 million at September 30, 2013, Teva inventory increased $2.4 million to $21.6 million at September 30, 2013, Sanuk inventory increased $3.9 million to $12.5 million at September 30, 2013, and the other brands’ inventory increased $4.8 million to $11.4 million at September 30, 2013. Full-Year 2013 Outlook Based on results for the third quarter of 2013 which included a tax benefit of approximately $2 million related to a lower, non-recurring tax rate combined with current visibility, the Company updated its full year outlook.
- The Company still expects full year revenues to increase approximately 8% over 2012 levels.
- The Company now expects full year diluted earnings per share to increase approximately 10% over 2012 levels, up from its previous projection of approximately 8%.
- The Company still expects fourth quarter 2013 revenue to increase approximately 14.5% over 2012 levels.
- The Company now expects fourth quarter 2013 diluted earnings per share to increase approximately 32% over 2012 levels, compared to its previous projection of approximately 38%.
You are cautioned not to place undue reliance on forward-looking statements contained in this press release, which speak only as of the date of this press release. You should read this press release with the understanding that our future results may be materially different from what we currently expect. We qualify all of our forward-looking statements by these cautionary statements and we expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof to conform such statements to actual results or to changes in our opinions or expectations, except as required by applicable law or the rules of the NASDAQ Stock Market.
|DECKERS OUTDOOR CORPORATION|
|Condensed Consolidated Balance Sheets|
|(Amounts in thousands)|
|September 30,||December 31,|
|Cash and cash equivalents||$||84,107||110,247|
|Trade accounts receivable, net||211,981||190,756|
|Other current assets||71,321||59,028|
|Income taxes receivable||14,194||-|
|Deferred tax assets||17,756||17,290|
|Total current assets||859,646||691,586|
|Property and equipment, net||164,412||125,370|
|Other intangible assets, net||90,986||95,965|
|Deferred tax assets||13,523||13,372|
|Liabilities and Stockholders' Equity|
|Trade accounts payable||144,306||133,457|
|Other accrued expenses||52,652||59,597|
|Income taxes payable||2,762||25,067|
|Total current liabilities||472,190||267,017|
|Deckers Outdoor Corporation stockholders' equity:|
|Additional paid-in capital||150,598||139,046|
|Accumulated other comprehensive loss||(717)||(1,400)|
|Total stockholders' equity||755,829||738,801|
|Total liabilities and equity||$||1,275,938||1,068,064|
|DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Amounts in thousands, except for per share data)|
|Three-month period ended September 30,||Nine-month period ended September 30,|
|Cost of sales||219,833||217,099||460,287||450,974|
|Selling, general and administrative expenses||120,395||99,684||353,885||303,326|
|Income from operations||46,497||59,609||6,398||42,834|
|Other expense (income), net||795||607||1,238||27|
|Income before income taxes||45,702||59,002||5,160||42,807|
|Income tax expense||12,642||15,941||368||11,850|
|Other comprehensive income (loss), net of tax|
|Unrealized loss on foreign currency hedging||(1,772)||(968)||(452)||(946)|
|Foreign currency translation adjustment||2,898||412||1,135||2,373|
|Total other comprehensive income (loss)||1,126||(556)||683||1,427|
|Net income attributable to:|
|Deckers Outdoor Corporation||33,060||43,061||4,792||30,809|
|Comprehensive income attributable to:|
|Deckers Outdoor Corporation||34,186||42,505||5,475||32,236|
|Net income per share attributable to Deckers|
|Outdoor Corporation common stockholders:|
|Weighted-average common shares outstanding:|