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Deckers’ web sales leap ahead by 45% in the second quarter

October 29, 2014 09:40 AM
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Deckers Outdoor Corp., a manufacturer and retailer of Ugg, Teva and other footwear brands, booked solid sales and income growth in the second quarter.

The company continues to focus on using its bricks-and-mortar stores to promote online sales in markets where it has new stores, omnichannel president David Powers told Wall Street analysts on its recent earnings call, according to a transcript by Seeking Alpha. “In North American markets, where we have opened up stores in the last 12 months, traffic to the Ugg site is up on average over 20% compared with a year ago,” Powers said.

Online revenue for the Ugg brand in North America was up about 29% in total compared to the same period a year ago, but Deckers has “seen even higher sales in markets where we have opened stores. We expect this trend will continue when we open more stores in under-penetrated, high-traffic areas,” Powers said.

The company’s in-store point-of-sale system, labeled Internet Ugg, enables retail stores to sell every SKU available from the Ugg brand, even if an item is not in stock in the store. That is “enhancing the consumer experience, improving our inventory productivity and driving higher sales,” Powers told analysts. Deckers recently expanded Internet Ugg to all stores in North America and all concept stores in Japan, and launched the program in Europe, Powers said.

For the second quarter of fiscal 2015 ended Sept. 30, Deckers, No. 160 in the Internet Retailer 2014 Top 500, reported:

  • E-commerce sales increased 45.0% to $21.6 million from $14.9 million for the second quarter of 2014.
  • Total sales increased 24.2% to $480.3 million from $386.7 million.
  • Retail sales increased 20.2% to $63.2 million from $52.6 million.
  • Comparable-store sales, which include worldwide retail same-store sales and worldwide comparable e-commerce sales, increased 3.3% over the same period last year.
  • Domestic sales increased 21.1% to $289.1 million from $238.8 million.
  • International sales increased 29.2% to $191.2 million from $147.9 million.
  • Ugg brand sales increased 23.8% to $417.1 million from $337.0 million.
  • Teva brand sales increased 15.0% to $20.7 million from $18.0 million.
  • Sanuk brand sales increased 3.2% to $19.0 million from $18.4 million.
  • Gross margin was 46.6% compared with 43.2%.
  • Net income of $40.7 million, an increase of 23.0% from net income of $33.1 million for the first six months of fiscal 2014.

E-commerce represented 4.5% of total sales for the footwear maker in the second quarter, compared with 3.9% in the comparable period in 2014.

Deckers’ strong Q2 results portend well for the rest of the year, says Canaccord Genuity analyst Camilo Lyon. “Consistent with our channel checks that indicated strong early demand for Uggs, Q2 benefitted from a pull-forward of $15 million to $16 million in incremental wholesale sales. We view this shift positively as it indicates strong early demand that is not weather-driven and should continue to build into the key winter months.”

For the first six months of fiscal 2015 Deckers reported:

  • E-commerce sales increased 44.5% to $37.0 million from $25.6 million for the same period last year.
  • Total sales increased 24.2% to $691.7 million from $556.8 million.
  • Net income of $3.7 million, down by 2.6% from net income of $3.8 million for the same period last year.

E-commerce represented 5.3% of total sales for the footwear maker in the first half of 2015, compared with 4.6% in the comparable period in 2014.

 

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