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Deckers Outdoor: Deckers Brands Reports Second Quarter Fiscal 2016 Financial Results

The following excerpt is from the company's SEC filing.

Second Quarter Net Sales Increased 5.4% to $506.2 Million on a Constant Currency Basis

Company Reports Second Quarter Diluted Earnings per Share of $1.11

GOLETA, Calif., Oct. 29, 2015 /PRNewswire/ -- Deckers Brands (NYSE: DECK), a global leader in designing, marketing and distributing innovative footwear, apparel and accessories, today announced financial results for the second quarter of fiscal 2016 which ended September 30, 2015.

Second Quarter Fiscal 2016 Financial Review

Net sales increased 5.4% to $506.2 million on a constant currency basis compared to $480.3 million for the same p eriod last year. On a reported basis, net sales increased 1.4% to a record $486.9 million.

Gross margin was 44.0% compared to 46.6% for the same period last year.

SG&A expense as a percentage of sales was 33.5% compared to 34.2% for the same period last year.

Diluted earnings per share was $1.11 compared to $1.17 for the same period last year. On a constant currency basis, diluted earnings per share increased 21.4% to $1.42.

"We delivered record second quarter revenue and continue to track towards achieving our financial objectives for the fiscal year," commented Angel Martinez, Chief Executive Officer and Chair of the Board of Directors. "I'm very pleased with our current performance which wouldn't have been possible without the strategic investments we've made in key areas of the business over the past several years. From Omni-Channel capabilities and product innovation to marketing and people, we are in the process of transforming the company into a consumer centric, global brand operator positioned to deliver sustainable top-line growth and operating margin expansion. Even during this investment phase, we have continued to demonstrate our commitment to returning value to shareholders by repurchasing more than $417 million of our common stock since 2011. The entire organization is energized as we begin what we believe will be an exciting new chapter in Deckers ongoing evolution."

Summary

UGG® brand net sales for the second quarter increased 0.9% to $421.1 million compared to $417.1 million for the same period last year. On a constant currency basis, sales increased approximately 5.3%. The increase in sales was primarily driven by an increase in domestic wholesale sales, partially offset by a decrease in global Direct-to-Consumer sales primarily driven by a decrease in tourist traffic in the U.S. as a result of the strengthening dollar.

Teva® brand net sales for the second quarter decreased 13.6% to $17.9 million compared to $20.7 million for the same period last year. On a constant currency basis, sales decreased approximately 11.8%. The decrease in sales was driven by a decrease in global wholesale and distributor sales.

Sanuk® brand net sales for the second quarter decreased 9.0% to $17.3 million compared to $19.0 million for the same period last year. The decrease in sales was driven by a decrease in global wholesale sales, partially offset by an increase in global Direct-to-Consumer sales.

Combined net sales of the Company's other brands increased 30.5% to $30.6 million compared to $23.5 million for the same period last year. The increase was primarily attributable to a $6.9 million increase in sales for the HOKA ONE ONE® brand compared to the same period last year.

Channel Summary (included in the brand sales numbers above)

Wholesale and distributor sales for the second quarter increased 1.2% to $400.3 million compared to $395.5 million for the same period last year. On a constant currency basis, sales increased approximately 4.9%. The increase in sales was driven by an increase in domestic wholesale sales, partially offset by a decrease in international wholesale and distributor sales.

Direct-to-Consumer sales for the second quarter increased 2.1% to $86.6 million compared to $84.8 million for the same period last year. On a constant currency basis, sales increased 7.5%. This increase was primarily driven by Direct-to-Consumer growth in the Hoka, Sanuk, and Teva brands. Direct-to-Consumer comparable sales were down 5.2% over the same period last year, primarily driven by a decrease in tourist traffic in the U.S. as a result of the strengthening dollar.

Geographic Summary (included in the brand and channel sales numbers above)

Domestic sales for the second quarter increased 4.3% to $301.6 million compared to $289.1 million for the same period last year.

International sales for the second quarter decreased 3.1% to $185.3 million compared to $191.2 million for the same period last year. On a constant currency basis, sales increased 7.1% to $204.6 million.

Gross Margins

Gross margin was 44.0% in the second quarter...


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