* Third-quarter earnings of $1.18/shr vs est. $1.04/shr
* Third-quarter sales $376.4 million vs est $413.5 million
* Shares down as much as 17 percent after the bell
(Adds outlook, inventory details, CEO comment, updates share
movement)
Oct 25 (Reuters) – Deckers Outdoor Corp reported
third-quarter sales way below analysts’ estimates as higher raw
material costs forced the shoe maker to raise prices on its UGG
sheepskin boots, putting off potential customers.
Deckers shares fell as much as 17 percent after the bell to
$29.30.
The company also revised downwards its sales forecast for
UGG brand, which accounts for nearly 90 percent of its total
revenue. It expects UGG sales to remain flat in 2012, compared
with a 10 percent growth it had projected previously.
Deckers said it had raised prices on its products to help
cushion the impact of rising sheepskin and raw material costs.
“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,” Chief Executive Angel Martinez
said in a statement.
Deckers cut its full-year revenue growth forecast to 5
percent from 14 percent, and said it now sees a 33 percent drop
in per-share earnings, compared with a fall of 9 to 10 percent
it had estimated previously.
Inventories rose 36 percent to $486.2 million as of Sept. 30
from a year ago.
Third-quarter profit was $43.1 million, or $1.18 per share,
compared with $62.3 million, or $1.59 per share, a year ago.
The company, which competes with Skechers USA Inc
and VF Corp’s Timberland, said net sales fell 9 percent
to $376.4 million.
Analysts on average had forecast a profit of $1.04 per share
on revenue of $413.5 million, according to Thomson Reuters
I/B/E/S.
UGG brand net sales fell 12 percent to $332.8 million.
Gross margin narrowed to 42.3 percent from 49 percent last
year.
Shares of the Goleta, California-based company, which have
fallen more than 50 percent this year, were trading at $30.44
after the bell. They closed at $35.49 on Thursday on the Nasdaq.
(Reporting by Chris Jonathan Peters in Bangalore; Editing by
Anil D’Silva)
