The rising prices of sheepskin and raw materials hammered Deckers Outdoor Corp.’s third quarter profits, the company says, although online sales jumped 29.1%
For the quarter ended Sept. 30, Deckers, maker of Ugg and Teva brand footwear and No. 161 in the Internet Retailer Top 500 guide, reported:
- E-commerce sales of $13.3 million, up by about 29.1% from $10.3 million in the third quarter of 2011.
- Total sales of $376.4 million, a 9.2% decrease from $414.4 million.
- Retail sales increased about 12.7% to $39.1 million compared with $34.7 million for the same period last year.
- Same-store sales decreased 13.1%.
- Domestic sales decreased 6.1% to $242.2 million from $257.9 million.
- International sales decreased 14.2% to $134.2 million from $156.4 million.
- Ugg brand sales decreased11.7% to $332.8 million from $376.7 million.
- Teva brand sales increased 21.8% to $17.9 million compared to $14.7 million.
- Sanuk brand sales increased 17.3% to $18.3 million from $15.6 million.
- Net income of $43.1 million, a 30.8% decrease from $62.3 million.
The web comprised about 3.5% of total sales in the quarter, compared with 2.5% in Q3 of last year.
“Over the past two years, we have raised prices on selective key styles to help mitigate the impact of an 80% increase in our sheepskin and raw material costs over this same period,” says Angel Martinez, president, CEO and chairman. “We believe that these selective price increases, particularly during a period of one of the warmest years on record, has pushed us above the consumer’s price-value expectations for the Ugg brand.”
For the first nine months of 2012, the company reported:
- E-commerce sales of $44.8 million, a 13.4% increase from $39.5 million for first three quarters of 2011.
- Total sales of $797.1 million, a 3.1% increase from $773.4 million.
- Net income of $31.0 million, a 58.5% decrease from $74.7 million.
- Retail sales grew 28.0%, to $99.7 million from $77.9 million.
- Domestic sales were $542.0 million, a 14.6% increase over $473.1 million in the first nine months of 2011.
- International sales were $270.9 million, a 4.8% decrease from $284.7 million.
The online channel comprised 5.6% of total sales in the first three quarter of the year, compared with 5.1% last year.