Stefano Caroti is a seasoned sporting goods industry executive who spent 23 years at Nike and six at Puma, where he served most recently as chief commercial officer. In his previous career at Nike, he ran the company's Italian and German subsidiaries before taking care of footwear and then retail for all of Europe, the Middle East and Africa.
At Deckers Brands, Caroti will act as president of omni-channel, with effect from Nov. 2, based at the company's head office in Goleta, California and reporting to Dave Powers, president of the group. His appointment is part of a plan to transform the company into a “consumer-centric” global operator of footwear brands. Deckers is the parent company of Ugg, Teva, Sanuk, Hoka One One and other minor brands.
In the second quarter ended June 30, Deckers' direct-to-consumer (DTC) revenues rose by 2.1 percent to $86.6 million, with an increase of 7.5 percent in constant currencies. The growth was driven by Hoka, Sanuk and Teva, although Ugg takes a much higher share of the group's DTC revenues.
Comparable store sales were down by 5.2 percent, and this was attributed to lower tourist traffic in the U.S. due to the strengthening dollar. Same-store sales were up at a low double-digit rate outside the U.S.
The group's total revenues increased by 1.4 percent to $486.9 million in the quarter, including a 5.4 percent increase in constant currencies. Sales in the U.S. grew by 4.3 percent to $301.6 million. They fell by 3.1 percent to $185.3 million in the rest of the world, where they were up by 7.1 percent in local currencies. Currency effects reduced total sales by $19 million.
For Ugg, Deckers reported increases of 0.9 percent in dollars and 5.3 percent in constant currencies. Teva's sales declined by 13.6 percent to $17.9 million, and they were off by 11.8 percent in constant currencies due to lower global sales to distributors and wholesale clients. Sanuk's sales dropped by 9.0 percent to $17.3 million, with lower wholesale revenues partly offset by higher DTC sales. Other brands generated a 30.5 percent higher turnover of $30.6 million, again led by a $6.9 million increase for Hoka, which was up by 51 percent.
The gross margin of the group fell by 2.6 percentage points to 44.0 percent in the quarter, with 2.1 percentage points due to foreign exchange headwinds. Net earnings of $36.4 million for the quarter were 3 percent lower than in the year-ago period.