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Deckers Q2 Results Hint to an Ugg Brand Reboot

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Welcome back Ugg. Deckers, owner of Ugg, Teva and Sanuk brands, reported on Thursday that the sheepskin line of footwear, handbags and home goods saw second quarter 2015 net sales increase 23.8% to $417.1 million compared to $337 million last year. Ugg’s positive results, which Deckers accredited to higher global wholesale sales, new worldwide retail store openings and an increase in global e-commerce sales, sharply contrasts the doom and gloom talk just two years ago when demand for the distinct cold-weather footwear stalled.

Perhaps shoppers are looking to buy replacement footwear after last winter’s polar vortex and record snowfall did a number on winter boots. President, CEO and chair of the board of directors, Angel Martinez said, “With temperatures turning cold in recent weeks, sell-through of weather boots and classics have gained pace across the majority of our markets.”

Overall Deckers net sales increased 24.2% to a record $480.3 million, compared to $386.7 million for the same period last year. Diluted earnings per share increased 23.2% to $1.17 compared to $0.95 last year.

Thanks to a ramped up social media campaign and its association with the Normcore fashion movement, Teva net sales increased 14.9% to $20.7 million compared to $18.0 million.

Looking ahead to the full fiscal year 2015, Deckers expects revenues to be approximately $1.825 billion or increase 15 percent over the year. It also predicts a 14 percent growth in Ugg revenues, and low double-digit increases for Teva and the surf brand Sanuk.

Martinez added, ”We believe that consumers are responding positively to the combination of sharper price points, innovation and enhanced aesthetics. At the same time, we plan to continue to focus on marketing programs and omnichannel initiatives to effectively communicate our product stories and drive increased conversions in our direct-to-consumer channel. We believe that we are well positioned for another successful holiday season, and more importantly, to drive growth for many years to come.”

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