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Deckers Net Sales Slide

Deckers Brands struggled in the fourth quarter and fiscal year 2017, reporting a net sales decrease across brands, except for Hoka One One.

For fiscal year 2017, Deckers Brands reported a net sales decrease of 4.5% to $1.790 billion, compared to $1.875 billion last year. Meanwhile, Deckers’ diluted earnings per share fell to $0.18, compared to diluted earnings per share of $3.70 last year.

In the fourth quarter Deckers reported a decrease of 2.4% net sales to $369.5 million, down from $378.6 million during the same period last year.

Domestic net sales for the fourth quarter faltered 4.3% to $230 million, down from $240 million during the same period last year. For FY 2017, domestic sales fell 6.4% to $1.141 billion.

International sales increased 0.9% for the fourth quarter to $139.5 million, while FY 2017 saw a decline of 1 percent to $648.8 million.

Overall wholesale net sales for the fourth quarter dropped 5.8% to $219.1 million, down from $232.7 million during the same period last year, while FY2017 saw a wholesale drop of 8.7% to $1.124 billion. However, overall, direct-to-consumer net sales for the fourth quarter increased 3 percent to $150.5 million.

Ugg reported a net sales decrease in the fourth quarter of 1.1% to $243 million, compared to $245.6 million during the same period last year. Ugg’s drop in sales was due to a decrease indomestic wholesale sales, partially offset by an improved international wholesale and direct-to-consumer sales. In FY 2017, Ugg reported a decrease in brand sales of 4.8% to $1.451 billion.

Teva reported a decrease in brand net sales for the fourth quarter of 13.3% to $51.3 million, compared to $59.1 million during the same quarter last year. The brand saw a decline in wholesale sales, partially offset by an increase in direct-to-consumer sales. For FY 2017, Teva brand sales dropped 11.5% to $117.7 million.

Sanuk also struggled in the fourth quarter, with a net sales decrease of 16.1% to $32.3 million, down from $38.5 million during the same period last year. The decline was driven by a drop in worldwide wholesale and direct-to-consumer sales. In FY 2017 Sanuk reported a drop-in sales of 13.6% to $91.8 million.

Deckers Brands combined net sales for other brands under the Deckers umbrella saw an increase in the fourth quarter of 21.2% to $42.9 million, compared to $35.4 million for the same period last year, thanks to a large increase in sales by Hoka One One of 32.7%. For FY 2017 combines sales of the other brands grew 16.2% to $129.6 million.

“Over the course of the last year, the organization has been hard at work identifying margin enhancing initiatives and detailing plans that significantly improve the profitability of the company. We now anticipate that the $150 million cumulative savings plan announced in February 2017 will drive a $100 million operating profit improvement by fiscal year 2020,” said Deckers Brands President and CEO Dave Powers. “I am proud of the work the team has accomplished, and I believe we have laid a solid foundation to execute on our savings plan. I am confident that these improvements will drive a significant increase in shareholder value over the long-term.”

The company expects net sales to decrease 2 percent to flat for FY 2018, with non-GAAP diluted earnings per share projected in the range of $3.95 to $4.15, excluding potential charges due to store closures or restructuring.

Deckers Brands also rolled out a long-term outlook for FY 2020, including projected total sales of around $2 billion and an operating margin over 13 percent.

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