Deckers Outdoor Corporation reported a drop in net income to $1.0 million in the first quarter of this year from $7.9 million in the first quarter a year ago due to higher operating costs, but the gross margin was 46.8 percent, up from 46.0 percent a year ago. Both sales and earnings per share exceeded the company's forecast.
The Ugg brand posted a sales increase of 7.9 percent for the quarter to $170.6 million. Teva's sales of $51.6 million were up by 3.6 percent on the first quarter a year ago, driven by gains in domestic wholesale and international distributor sales, but its wholesale revenues abroad went down. Sales of the Sanuk brand declined by 4.4 percent to $30.9 million, due to decreasing sales to foreign distributors, which offset increased domestic wholesale and e-commerce revenues.
Combined sales of the company's other brands rose by 76.3 percent to $10.6 million, primarily due to the addition of the Hoka One One brand, the brand of trail-running shoes founded by Jean-Luc Diard and Nicolas Mermoud, in which Deckers acquired a major stake in September 2012. As previously reported, Deckers recently bought all the shares it didn't own in the fast-growing company.
Retail sales went up by 37.6 percent to $63.6 million for the quarter, following 29 new store openings after the first quarter of 2012 and a 6.6 increase on a same-store basis for the 13 weeks to March 31, 2013 against the 13 weeks ended April 1, 2012. Global e-commerce rose by 22.6 percent to $26.6 million, driven primarily by strong sales for Ugg brand, increased domestic sales for Sanuk shoes and the addition of new e-commerce websites outside the U.S.
The group's domestic sales were $182.7 million, up 7.1 percent on the first quarter a year ago. International sales increased by 7.0 percent to $81.1 million. The company still expects full-year revenues to rise about 7 percent over 2012 levels, although they are expected to be flat in the second quarter. The company also expects a gross profit margin of around 46.5 percent and an operating margin of around 12.5 percent for the year (more already published in SGI Europe).