Deckers Brands, the Goleta, California-based company known for its footwear, accessories, and apparel, recently announced disappointing declines in sales and earnings for its fourth quarter. Despite this setback, the company managed to maintain strong growth in a few of its brands.

In the fourth quarter ending on March 31, 2020, Deckers Brands reported a decline of 4.9% in net sales, amounting to $374.9 million. When adjusted for constant currencies, the decline was 4.5%. The decrease in sales can be attributed to the impact of the Covid-19 pandemic, as Deckers’ stores in Europe and North America were closed since March 17. Although the full effects of these closures will be seen in the first quarter of 2021, the company is already feeling the impact.

Deckers’ largest brand, Ugg, experienced a significant decline in sales during the fourth quarter, falling by 17.9% from $239.0 million to $196.3 million. Sanuk, another brand that specializes in casual footwear, also saw a substantial decline of 57.8% in revenues, totaling $13.3 million compared to $31.5 million in the previous year. However, not all brands faced negative results. Hoka One One, a popular running shoe brand, reported a 51.8% increase in sales, reaching $101.9 million, up from $67.1 million in the fourth quarter of 2019. Similarly, the Teva sport sandal brand saw a 12.5% increase in sales, reaching $59.6 million compared to $52.9 million in the same period the previous year.

Both the company’s wholesale and direct-to-consumer (DTC) channels experienced declines in quarterly sales, with decreases of 2.9% and 7.9% respectively. Domestic sales fell by 8.4%, while international sales managed a slight increase of 1.4%. The net income for the quarter was $16.1 million, or $0.57 per diluted share, compared to $24.0 million, or $0.82 per diluted share, in the same period last year.

Despite the challenges faced in the fourth quarter, Deckers Brands reported overall growth for the full fiscal year 2020, with net sales reaching $2.133 billion, a 5.6% increase compared to the previous year. Adjusted for constant currencies, the increase was 6.5%. Annual net income was $276.1 million, or $9.62 per diluted share, compared to $264.3 million, or $8.84 per diluted share, in fiscal 2019.

Deckers President and CEO Dave Powers commented on the results, highlighting the strength of the brand portfolio and the successful implementation of key initiatives. He acknowledged that fiscal year 2021 will be impacted by the Covid-19 pandemic but expressed confidence in the company’s ability to overcome the challenges. With in-demand brands, omni-channel capabilities, and a healthy balance sheet, Deckers Brands remains well-positioned for the future.

In response to the Covid-19 pandemic, Deckers Brands has temporarily closed its stores and furloughed a portion of its retail associates. The company is focused on leveraging the resilience of its brands and implementing omni-channel strategies to meet the evolving demands of consumers.

Useful links:
1. Deckers Brands Official Website
2. Deckers Brands Stock Information