Deckers Outdoor Corp Earnings Cheat Sheet: Higher-Than-Expected Net Income

Deckers Outdoor Corporation (NASDAQ:DECK) reported net income above Wall Street’s expectations for the third quarter. Deckers Outdoor Corporation is a designer, producer, marketer, and brand manager of innovative, high-quality footwear and accessories.

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Deckers Outdoor Earnings Cheat Sheet for the Third Quarter

Results: Net income for Deckers Outdoor Corporation rose to $62.3 million ($1.59 per share) vs. $42.1 million ($1.07 per share) in the same quarter a year earlier. This marks a rise of 47.9% from the year earlier quarter.

Revenue: Rose 49.1% to $414.4 million from the year earlier quarter.

Actual vs. Wall St. Expectations: DECK beat the mean analyst estimate of $1.34 per share. It beat the average revenue estimate of $387 million.

Quoting Management: “The third quarter was an exceptionally strong period of sales and earnings growth for our Company led by the UGG brand,” stated Angel Martinez, President, Chief Executive Officer and Chair of the Board of Directors. “We experienced higher domestic wholesale demand for the UGG brand fall line versus a year ago driven by the introduction of several new styles and new collections, including a broader assortment of men’s product. At the same time, our international sales more than doubled fueled by the growth in wholesale unit volumes in the United Kingdom and Benelux, coupled with an increase in sales resulting from our conversion to wholesale operations in these regions. Our retail stores, which now total 37 worldwide, performed very well during the third quarter highlighted by a 15.4% same store sales increase. The growth of the spring line earlier this year combined with the solid start to fall has created strong momentum for the UGG brand as we head into the holidays.” Mr. Martinez continued, “Fiscal 2011 is on track to be another record year for Deckers Outdoor Corporation with the UGG brand poised to surpass $1 billion in annual sales. Equally important, we have made strategic investments that have strengthened our global operating platform and better positioned the company for sustainable long-term growth. These included our acquisition of the Sanuk brand, our hiring of key personnel to spearhead international expansion, additional marketing and advertising investments, and our planned opening of a total of 17 new company-owned stores in fiscal year 2011. As we look out to next year, we remain optimistic about our growth opportunities despite some of the current headwinds facing the global economy. However, we will experience further increases in raw material prices in 2012.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 27.7%, with the biggest boost coming in the most recent quarter when revenue rose 49.1% from the year earlier quarter.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 5 cents in the second quarter, by 2 cents in the first quarter, and by 28 cents in the fourth quarter of the last fiscal year.

Margins rose in the second quarter after falling the quarter before. Gross margin rose 1.8 percentage points to 49% from the quarter earlier quarter. In the first quarter, the figure rose 1.6 percentage points to 42.7% from the year earlier quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the fourth quarter has moved up from $3.09 a share to $3.17 over the last ninety days. Over the past three months, the average estimate for the fiscal year has climbed from $4.72 per to share to $4.82.

Competitors to Watch: Crocs, Inc. (NASDAQ:CROX), NIKE, Inc. (NYSE:NKE), The Timberland Company (NYSE:TBL), Skechers USA, Inc. (NYSE:SKX), Steven Madden, Ltd. (NASDAQ:SHOO), The Global Housing Group (GLHO), LaCrosse Footwear, Inc. (NASDAQ:BOOT), Wolverine World Wide, Inc. (NYSE:WWW), and Phoenix Footwear Group, Inc. (AMEX:PXG).

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(Source: Xignite Financials)

 

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