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Deckers Posts Strong Q4, But Still Cautious

Deckers Outdoor Corp., led by Ugg sales, continued to thrive during the fourth quarter, though the company issued a more conservative outlook going forward.

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LOS ANGELES — Deckers Outdoor Corp., led by Ugg sales, continued to thrive during the fourth quarter, though the company issued a more conservative outlook going forward.

Susquehanna Financial Group analyst Christopher Svezia said Deckers is typically cautious when it comes to issuing guidance. “They tend to be very conservative,” he said. “People recognize it’s a tough environment and there will be some headwinds. [However, Ugg] is still one of the most relevant brands out there right now.”

Deckers said it now expects 2009 earnings of $7.27 a share on a non-GAAP basis. Analysts had expected $8.05 a share.

During a conference call with investors and analysts, Chairman, President and CEO Angel Martinez said challenges at retail are prompting the company to rein in its expectations for 2009. “Retailers across the board are planning [their] businesses more conservatively, and therefore, we have to as well. We expect full-year revenues to increase approximately 6 percent to 9 percent over 2008 levels, and diluted [earnings per share] to be flat or slightly down compared with this past year.”

The company reported that for the quarter ended Dec. 31, net earnings increased 14 percent to $40.5 million, or $3.07 per diluted share, compared with $35.4 million, or $2.69, for the same year-ago period.

Once again, the company’s Ugg brand led sales during the quarter. Driven by heavy fall and holiday orders, sales for the brand increased 62 percent during the quarter to $288 million, compared with $177.7 million a year ago. Sales of the Simple brand increased 27 percent to $17.2 million. Teva sales declined 11 percent to $12.4 million, from $13.9 million in the same period last year.

Sales during the quarter grew by 56 percent to $303.5 million, from $194.2 during the fourth quarter of 2007.

For the full year, the company reported net income of $73.9 million, or $5.60 a share, compared with $66.4 million, or $5.06, in 2007. Net sales during the year increased 54 percent to $689.4 million, from $448.9 million the prior year.