Deckers 4Q net income falls 23 percent

Deckers 4th-qtr income falls, shares rise as company forecasts better Ugg boots sales in 2013

Associated Press

GOLETA, Calif. (AP) -- Deckers Outdoor Corp., the maker of Ugg boots, said Thursday that its net income fell 23 percent in the fourth quarter.

However the company said retail sales trends got better, and it expects Ugg sales to improve this year after declining in 2012. Shares of Deckers rose $3, or 7.4 percent, to $43.41 in after-hours trading. The stock has lost about half its value over the last year.

Sales of Ugg sheepskin boots rose 3 percent to $584.8 million in the fourth quarter on sales from new retail stores and better online sales. Sales of Sanuk footwear rose to $15.3 million from $11 million and Teva sales fell to $13.7 million from $19.4 million.

Net income declined to $97 million, or $2.77 per share, from $126 million, or $3.18 per share. Revenue rose 2 percent to $617.3 million.

Analysts expected $2.57 per share and $621.9 million in revenue, according to FactSet.

Over the last two years the company has raised the price of Ugg boots to offset big increases in the price of sheepskin and other raw materials. Deckers said those price increases hurt its sales, and in late October it said it had decided to lower the prices on some classic Ugg styles. The cuts were retroactive to July.

Net income for all of 2012 sank 35 percent to $129.3 million, or $3.45 per share, from $199 million, or $5.07 per share. Revenue grew by 3 percent to $1.41 billion. Ugg sales fell 1.5 percent to $1.18 billion.

The company expects net income of about $3.62 per share for 2013, and said total sales should grow about 7 percent, which suggests a total of $1.51 billion. Deckers said sales of Ugg products will grow 4 percent to about $1.23 billion, and it also expects improved sales of Teva and Sanuk.

Analysts expect net income of $3.71 per share and $1.49 billion in revenue on average.

The company forecast a loss of 12 cents per share in the first quarter, and said sales will be about the same as they were in the first quarter of 2012, when it reported revenue of $246.3 million. Analysts are estimating $257.9 million in revenue, on average.

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