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Oct 29, 2010
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UGG sales boost Deckers Q3; co ups FY view

By
Reuters
Published
Oct 29, 2010

Uggs
(Reuters) - UGG boots maker Deckers Outdoor Corp (DECK.O) topped third-quarter estimates on Thursday as demand for its popular sheepskin boots remained strong, prompting the company to raise its full-year outlook.

Shares of the company rose 6 percent after market.

UGG boots have been the chief growth driver for Deckers for some time now, with wholesale sales of UGG typically making up about 80 percent of its total sales in the third quarter.

An unusually warm weather has been a cause for worry for many retailers, causing fewer sales of fall merchandise, but most analysts have said retailers have not cut back on stocks of the Australian sheepskin-and-fleece boots.

"We plan to increase our investment in the UGG brand to bring our brand spend... up to be more in line with premium global brands," Chief Executive Angel Martinez said on a conference call with analysts.

The company recently tied up with high-fashion brand Jimmy Choo to sell upmarket designer UGGs at stores like Bergdorf Goodman [NMRCUS.UL] and Harrod's.

Net sales at the company, whose rivals include Skechers USA Inc (SKX.N) and Timberland (TBL.N), rose 21.7 percent to $277.9 million. UGG sales rose 20.2 percent, chiefly due to a rise in global shipments of fall products.

The Goleta, California-based company now expects full-year revenue to rise some 16 percent, compared with its earlier view of 14 percent.

It expects earnings to rise 22 percent compared with its earlier view of about a 16 percent rise.

Deckers, which also owns the Teva, Tsubo and Simple brands, said it earned $42.1 million, or $1.07 a share, compared with analyst estimates of 93 cents a share.

Analysts were expecting revenue of $265.00 million, according to Thomson Reuters I/B/E/S.

The company also reiterated its fourth-quarter view.

Deckers shares have risen about 4 percent since it reported second-quarter results in July. They were up at $56.77 after market. They closed at $53.99 Thursday on Nasdaq.

(Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Roshni Menon)

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