Deckers Brands reported on Thursday its fourth quarter and fiscal 2016 financial results ended March 31, 2016.
Fourth quarter net sales increased 11.2% to a record $378.6 million from $340.6 million in the previous year. On a constant currency basis, net sales increased 12.4%.
Wholesale and distributor net sales for the fourth quarter increased 13.4% to $232.7 million from $205.1 million due to an increase in global warehouse sales, and direct-to-consumer sales increased 7.7% to $145.9 million from $135.5 million. Domestic sales increased 10.4% to $240.4 million and international net sales increased 12.4% to $138.2 million.
UGG net sales increased 13.3% to $245.6 million from $216.8 million and increased 15.2% on a constant currency basis. Teva net sales also increased 11.3% to $59.1 million from $53.1 million, Sanuk net sales decreased 1.9% to $38.5 million from $39.2 million and combined net sales of the company’s other brands increased 12.4% to $35.4 million from $31.5 million.
Gross margin was 40.9% compared to 44.7% in last year’s fourth quarter and non-GAAP gross margin was 42.3%. SG&A expenses as a percentage of sales were 48.3% compared to 44.5% in the previous year and non-GAAP SG&A expenses were 40.8% of sales. Diluted earnings loss per share was $0.73.
Full year net sales increased 3.2% to a record $1.875 billion from $1.817 billion in the previous year. Gross margin was 45.2% versus 48.3% from last year and SG&A expenses as a percentage of sales were 36.5%.
Wholesale sales increased 2.6% to $1.231 billion and direct-to-consumer sales increased 4.4% to $644.3 million.
UGG full year net sales increased 2.1% to $1.524 billion and increased 5.0% on a constant currency basis. Teva full year sales increased 5.0% to $133.0 million, Sanuk brand sales decreased 7.4% to $106.2 million and combined sales of the company’s other brands increased 35.4% to $111.6 million.
“Our stronger than expected fourth quarter Non-GAAP operating results are very encouraging given the current market environment,” commented Angel Martinez, Chief Executive Officer and Chair of the Board of Directors. “Looking back on the year, our performance was challenged by record warm weather across the globe and store traffic declines across retail. While these issues have created lingering headwinds for the industry, I am confident that Deckers is well positioned to increase long-term shareholder value with the new leadership team in place, our robust Omni-Channel capabilities and strong brand portfolio.”
The company expects its first quarter 2017 net sales to be down 20% to 25% and a diluted loss of $2.10 to $2.20. The full year 2017 net sales are also expected to be down from 3% to flat. Gross margin is expected to range from 47.0% to 47.5% and SG&A expenses are projected to be 37%.
In addition, Deckers announced on Thursday that Dave Powers will succeed Angel Martinez as Deckers Brands CEO, effective May 31, 2016. Powers held senior executive roles at Nike, Timberland and Gap before joining Deckers in 2012 as President of Direct-to-Consumer, and he was promoted to President of Deckers Brands in March 2015.
Martinez will retire from the company and will continue to serve as Chairman of the Board of Directors.
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