Deckers Outdoor’s Q2 net sales up by 13.1 percent

Deckers Outdoor announced its financial results for the

second quarter ended June 30, 2012. Its net sales increased 13.1 percent to 174.4 million dollars (Rs 966 crores) compared to 154.2 million dollars (Rs 854 crores) for the same period last year. Gross margin reduced to 42.2 percent from last year’s same period of 42.7 percent. Diluted loss per share was 0.53 dollars (Rs 29) compared to 0.19 dollars (Rs 10.5) for the same period last year.

Sales for the retail store business increased 25 percent to 25.2 million (Rs 139 crores) percent for the second quarter compared to 20.1 million dollars (Rs 111 crores) for the same period last year. This increase was driven by 21 new stores opened after the second quarter of 2011 and a same store sales increase of 6.8 percent for the thirteen weeks ending July 1, 2012 compared to the thirteen weeks ending July 3, 2011.

At June 30, 2012, cash and cash equivalents were 114.4 million dollars (Rs 633 crores) compared to 325.2 million dollars (Rs 1,801 crores) at June 30, 2011. The decrease in cash and cash equivalents was attributable to 153.5 million dollars (Rs 853 crores) of cash payments associated with the Sanuk brand acquisition and 100 million dollars (Rs 554 crores) of cash payments for stock repurchases.

During the second quarter of 2012, the company repurchased approximately 1,475,000 shares of its common stock under its stock repurchase program for a total of 80 million dollars (Rs 443 crores). As of June 30, 2012, the company had completed its 100 million dollars (Rs 554 crores) stock repurchase program announced in February 2012.

The company also announced the Board of Directors’ approval to repurchase up to an additional 200 million dollars (Rs 1108 crores) of the company’s common stock in the open market or in privately negotiated transactions, in compliance with the Securities and Exchange Commission Rule 10b-18, from time to time, subject to market conditions, applicable legal requirements and other factors.

The guidance is still based on a full year gross margin decline of approximately 250 basis points from 2011 levels and SG&A as a percentage of sales of approximately 30 percent. Fiscal 2012 guidance includes 17 million dollars (Rs 941 crores), or 0.30 dollars (Rs 16.6) per diluted share associated with amortization and accretion expenses related to the Sanuk brand acquisition, up from previous guidance of 13 million dollars (Rs 720 crores), or 0.23 dollars (Rs 12.7) per diluted share.

The company currently expects third quarter 2012 revenue to increase approximately 1 percent and diluted earnings per share to decrease approximately 31 percent from 2011 levels. For the fourth quarter 2012, it expects its revenue to increase approximately 19 percent and diluted earnings per share to increase approximately 22 percent over 2011 levels.

Deckers Outdoor designs, manufactures and markets innovative, function-oriented footwear, primarily sandals for outdoor, sports and recreational activities.