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Deckers Outdoor Corporation (DECK - Free Report) reported narrower-the-expected first-quarter fiscal 2019 loss. This footwear and apparel retailer posted quarterly loss of 98 cents a share that fared better than the Zacks Consensus Estimate of loss of $1.42 and the prior-year quarter loss of $1.28. This was the sixth straight quarter that the company’s bottom line has outperformed the consensus mark.
The top line also sustained its winning streak improving 19.5% to $250.6 million during the quarter, following an increase of 8.4% in the preceding quarter. Net sales also came ahead of the Zacks Consensus Estimate of $228.9 million, marking the sixth successive quarter of positive surprise. On a constant currency basis, net sales grew 17.6%. Sturdy top-line performance was driven by sales increase across UGG, HOKA ONE ONE and Teva brands.
Deckers in the last quarter had guided net sales in the range of $225-$235 million and loss per share in the range of approximately $1.41-$1.50. Instead, this Goleta, CA-based company went on to post far better results than anticipated. However, in spite of reporting better-than-expected results not much movement was noticed in the stock during the post-market trading hours. Analysts pointed that this may be due to the company’s subdued second-quarter view that overshadowed the upbeat projection for fiscal 2019.
Nevertheless, we note that shares of this Zacks Rank #1 (Strong Buy) company have increased about 35% in the past six months outperforming the industry’s growth of 12%. Deckers is focused on expanding brand assortments, introducing more innovative line of products, targeting consumers digitally through marketing and sturdy e-commerce along with optimizing omni-channel distribution.
Gross margin expanded 270 basis points to 45.9% on the back of cost containment efforts and improved full-price selling. Adjusted SG&A expenses were $153.9 million up from $144.9 million for the same period last year, while as a percentage of revenue SG&A expenses came in at 61.4% down from 69.1% in the year-ago period.
Adjusted operating loss came in at $38.9 million compared with loss of $54.3 million in the year-ago period.
Deckers Outdoor Corporation Price, Consensus and EPS Surprise
The company’s domestic net sales jumped 17.4% to $141.7 million in the reported quarter. Meanwhile, international net sales rose 22.3% to $108.9 million.
Direct-to-Consumer (“DTC”) net sales advanced 12% to $73 million. DTC comparable sales rose 6.2% year over year. Wholesale net sales in the reported quarter grew 22.9% to $177.6 million.
Brand-wise Discussion
UGG brand net sales increased 18.9% to $136.5 million in the reported quarter. Net sales for the Sanuk brand, known for its exclusive sandals and shoes, came in at $24.4 million, down 6.6% year over year.
HOKA ONE ONE brand net sales surged 53.1% to $47 million, while Teva brand net sales grew 6.2% to $40 million.
Other Financial Aspects
At the end of the quarter, Deckers had cash and cash equivalents of $417.9 million, total short-term borrowings and mortgage payable of $31.9 million and shareholders’ equity of $902.2 million.
During the quarter under review, Deckers bought back approximately 86,000 shares of worth $10 million. As of Jun 30, 2018, the company had $241 million remaining under its $400 million share buyback program.
Guidance
Deckers provided an encouraging view for fiscal 2019. Management now anticipates net sales to be in the band of $1,930-$1,955 million, up from its prior projection of $1,925-$1,950 million.
Further, adjusted earnings are projected to be in the range of $6.25-$6.45 per share, which portrays an improvement over $5.74 reported in fiscal 2018. The current Zacks Consensus Estimate for fiscal 2019 is $6.34. The company had earlier guided adjusted earnings in the range of $6.20-$6.40 per share.
Gross margin for the fiscal year is anticipated to be marginally better than 49%. Further, SG&A expense as a percentage of sales is projected to be marginally better than 36.5%. Operating margin is envisioned to be in the range of 12.6-12.8%.
In the second quarter, net sales are estimated to be in the range of $485-$495 million compared with $482.5 million reported in the year-ago period. Analysts polled by Zacks envisions revenue of $511.6 million for the quarter. Management forecasts earnings of approximately $1.60 to $1.70 compared with $1.54 per share in the prior-year quarter. The current Zacks Consensus Estimate for the quarter is $1.95.
Columbia Sportswear (COLM - Free Report) delivered an average positive earnings surprise of 18.1% in the trailing four quarters. It carries a Zacks Rank #2 (Buy).
V.F. Corporation (VFC - Free Report) delivered an average positive earnings surprise of 11.6% in the trailing four quarters. It has a long-term earnings growth rate of 9.9% and a Zacks Rank #2.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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Deckers (DECK) Posts Narrower-than-Expected Q1 Loss, Ups View
Deckers Outdoor Corporation (DECK - Free Report) reported narrower-the-expected first-quarter fiscal 2019 loss. This footwear and apparel retailer posted quarterly loss of 98 cents a share that fared better than the Zacks Consensus Estimate of loss of $1.42 and the prior-year quarter loss of $1.28. This was the sixth straight quarter that the company’s bottom line has outperformed the consensus mark.
The top line also sustained its winning streak improving 19.5% to $250.6 million during the quarter, following an increase of 8.4% in the preceding quarter. Net sales also came ahead of the Zacks Consensus Estimate of $228.9 million, marking the sixth successive quarter of positive surprise. On a constant currency basis, net sales grew 17.6%. Sturdy top-line performance was driven by sales increase across UGG, HOKA ONE ONE and Teva brands.
Deckers in the last quarter had guided net sales in the range of $225-$235 million and loss per share in the range of approximately $1.41-$1.50. Instead, this Goleta, CA-based company went on to post far better results than anticipated. However, in spite of reporting better-than-expected results not much movement was noticed in the stock during the post-market trading hours. Analysts pointed that this may be due to the company’s subdued second-quarter view that overshadowed the upbeat projection for fiscal 2019.
Nevertheless, we note that shares of this Zacks Rank #1 (Strong Buy) company have increased about 35% in the past six months outperforming the industry’s growth of 12%. Deckers is focused on expanding brand assortments, introducing more innovative line of products, targeting consumers digitally through marketing and sturdy e-commerce along with optimizing omni-channel distribution.
Gross margin expanded 270 basis points to 45.9% on the back of cost containment efforts and improved full-price selling. Adjusted SG&A expenses were $153.9 million up from $144.9 million for the same period last year, while as a percentage of revenue SG&A expenses came in at 61.4% down from 69.1% in the year-ago period.
Adjusted operating loss came in at $38.9 million compared with loss of $54.3 million in the year-ago period.
Deckers Outdoor Corporation Price, Consensus and EPS Surprise
Deckers Outdoor Corporation Price, Consensus and EPS Surprise | Deckers Outdoor Corporation Quote
Sales by Geography & Channel
The company’s domestic net sales jumped 17.4% to $141.7 million in the reported quarter. Meanwhile, international net sales rose 22.3% to $108.9 million.
Direct-to-Consumer (“DTC”) net sales advanced 12% to $73 million. DTC comparable sales rose 6.2% year over year. Wholesale net sales in the reported quarter grew 22.9% to $177.6 million.
Brand-wise Discussion
UGG brand net sales increased 18.9% to $136.5 million in the reported quarter. Net sales for the Sanuk brand, known for its exclusive sandals and shoes, came in at $24.4 million, down 6.6% year over year.
HOKA ONE ONE brand net sales surged 53.1% to $47 million, while Teva brand net sales grew 6.2% to $40 million.
Other Financial Aspects
At the end of the quarter, Deckers had cash and cash equivalents of $417.9 million, total short-term borrowings and mortgage payable of $31.9 million and shareholders’ equity of $902.2 million.
During the quarter under review, Deckers bought back approximately 86,000 shares of worth $10 million. As of Jun 30, 2018, the company had $241 million remaining under its $400 million share buyback program.
Guidance
Deckers provided an encouraging view for fiscal 2019. Management now anticipates net sales to be in the band of $1,930-$1,955 million, up from its prior projection of $1,925-$1,950 million.
Further, adjusted earnings are projected to be in the range of $6.25-$6.45 per share, which portrays an improvement over $5.74 reported in fiscal 2018. The current Zacks Consensus Estimate for fiscal 2019 is $6.34. The company had earlier guided adjusted earnings in the range of $6.20-$6.40 per share.
Gross margin for the fiscal year is anticipated to be marginally better than 49%. Further, SG&A expense as a percentage of sales is projected to be marginally better than 36.5%. Operating margin is envisioned to be in the range of 12.6-12.8%.
In the second quarter, net sales are estimated to be in the range of $485-$495 million compared with $482.5 million reported in the year-ago period. Analysts polled by Zacks envisions revenue of $511.6 million for the quarter. Management forecasts earnings of approximately $1.60 to $1.70 compared with $1.54 per share in the prior-year quarter. The current Zacks Consensus Estimate for the quarter is $1.95.
3 Hot Stocks Awaiting Your Look
G-III Apparel (GIII - Free Report) delivered an average positive earnings surprise of 190.8% in the trailing four quarters. It has a long-term earnings growth rate of 15% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Columbia Sportswear (COLM - Free Report) delivered an average positive earnings surprise of 18.1% in the trailing four quarters. It carries a Zacks Rank #2 (Buy).
V.F. Corporation (VFC - Free Report) delivered an average positive earnings surprise of 11.6% in the trailing four quarters. It has a long-term earnings growth rate of 9.9% and a Zacks Rank #2.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>