Outdoor financials: Deckers' Q4 profit triples, shares drop on weak Q1 forecast, plus Rocky Brands, LaCrosse/Danner, Exel, Johnson Outdoors, Under Armour
Deckers' Q4 profit tripled while shares dropped on a weak Q1 forecast, Rocky Brands reported a modest Q4 sales gain, Danner received a $1.3 million order for boots, Exel posted a 1 percent increase in FY '07 sales, Johnson Outdoors declares quarterly dividend, and Under Armour appointed a new CFO and new COO.
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Deckers’ Q4 profit triples, shares drop on weak Q1 forecast
Deckers Outdoor (Nasdaq: DECK) said its fourth-quarter profit nearly tripled on strong demand for Ugg brand products and international sales.
The company earned $35.4 million, or $2.69 per share, up from $12.2 million, or $0.95 per share in the prior year quarter. Revenue rose 57 percent to $194.2 million from $124.4 million.
The company said sales of its Ugg brand products rose 62 percent on demand for the women’s fall line, including boots, slippers, casuals and the fashion collection. International sales rose 71 percent.
For the full year, the company earned $66.4 million, or $5.06 per share, compared with a profit of $30.6 million, or $2.38 per share, in 2006. Revenue rose to $448.9 million from $304.4 million.
Fourth-quarter net sales for Ugg increased 61.8 percent to $177.7 million versus $109.9 million for the same period a year ago. For the full year, Ugg sales increased 64.4 percent to a record $347.6 million versus $211.5 million in 2006.
Teva’s net sales for the fourth quarter increased 6.8 percent to $13.9 million compared to $13.0 million for the same period last year. For the full year, its sales increased 9.2 percent to $87.9 million compared to $80.5 million in the prior year.
Net sales for Simple increased 76.2 percent to $2.6 million for the fourth quarter compared to $1.5 million for the same period last year. For the full year, its sales were up 8.2 percent to $13.5 million compared to $12.5 million a year ago.
Additionally, it expects a 25-percent jump in first-quarter and 2008 revenue, implying a first-quarter revenue boost to about $90.8 million from $72.6 million and full-year revenue of about $561.1 million. Revenue reached $448.9 million in 2007.
The company also said first-quarter earnings per share will be equal to or modestly higher than a year ago, while the full-year figure will rise about 20 percent. The company earned $0.75 per share in the first-quarter of 2007 and $5.06 per share for the year.
Wedbush Morgan Securities analyst Jeff Mintz said in a client note that the lower earnings relate to higher expenses as the company expands, which is spread out evenly across the quarters but makes a bigger impact the first quarter, which has seasonally less revenue.
“The issue is primarily explained by incremental selling, general & administration costs,” Mintz wrote. The higher costs aren’t necessarily a negative, he added.
“Selling, general and administrative expenses are going to be higher when the business gets bigger,” he wrote, adding the costs have to do with new hires and ramping up Deckers’ distribution center.
However, the weaker first-quarter forecast caused shares to fall $15.82 to close at $110.64 on Feb. 29. The stock has traded between $62.11 and $166.50 during the past 52 weeks.
Meanwhile, RBC Capital Markets analyst Howard Tubin upgraded the stock to “Outperform,” and wrote in a client note that Deckers’ Uggs will likely continue to be popular amid a difficult consumer environment.
“Uggs were one of the few must-have items this past holiday,” he wrote. “In the currently difficult environment, we believe that retailers will stick with proven winners when it comes to placing orders and reorders for future product, and this will likely sustain the company’s momentum.”
Rocky Brands reports modest Q4 sales gain
Despite a decline in outdoor and western footwear sales in its wholesale segment, Rocky Brands (Nasdaq: RCKY) reported a 2.8 percent increase in fourth-quarter net sales.
Quarterly net sales were $72.5 million compared to $70.6 million a year ago. The company reported that higher sales in its retail segment and to a lesser extent, footwear sales to the military, partially offset a decline in outdoor and western footwear sales in its wholesale segment.
Gross profit in the fourth quarter was $28.7 million, or 39.6 percent of sales compared to $28.2 million, or 40.0 percent for the same period last year.
Selling, general and administrative (SG&A) expenses were $26.2 million, or 36.1 percent of sales, for the fourth quarter of 2007 compared to $24.5 million, or 34.7 percent of sales, a year ago. The increase was primarily a result of higher salaries, commissions and bad debt expenses versus the year before, it said.
Income from operations, excluding the non-cash intangible impairment charge, was $2.5 million, or 3.5 percent of net sales for the fourth quarter of 2007, compared to income from operations, excluding the impairment loss on the carrying value of the Gates trademark, of $3.8 million or 5.3 percent of net sales for the fourth quarter of 2006.
For FY ’07, net sales were $275.3 million compared to net sales of $263.5 million in 2006. The company said the 4.5-percent increase in sales was primarily attributable to higher sales in its retail segment.
Gross profit was $108.0 million, or 39.2 percent of sales, compared to $109.3 million, or 41.5 percent of sales for the same period last year. SG&A expenses were $96.4 million, or 35.0 percent of sales, compared to $89.6 million, or 34.0 percent of sales, a year ago.
Inventory decreased to $75.4 million at Dec. 31, 2007, compared with $77.9 million on the same date a year ago.
Danner receives $1.3 million order for boots
Danner, a subsidiary of LaCrosse Footwear (Nasdaq: BOOT), said it has received $1.3 million in orders for boots for the U.S. Marines.
The company will supply 5,320 pairs of a Danner Marine Hot boot, which is built with materials to mitigate heat, in several shipments in the first half of 2008. In addition, Danner received an order to ship 3,334 pairs of a cold-weather boot by the end of the second quarter.
These new orders are in addition to the nearly $1 million in contract orders with the Marines announced earlier this month.
Exel posts 1 percent increase in FY ’07 sales
Exel Oyj reported net sales for FY ’07 increased to EUR 113.5 million (USD $168.5 million), or 1.0 percent over the previous year. Fourth-quarter net sales were EUR 28.1 million (USD $41.7 million).
Operating profit for FY ’07 was EUR 4.8 million (USD $7.1 million), representing 4.2 percent of net sales including a loss of EUR 5.3 million (USD $7.8 million) for non-recurring items. Fourth-quarter operating profit was EUR 0.7 million, or 2.4 percent of net sales including a loss of EUR 1.1 million (USD $1.6 million) for non-recurring items
Net operative cash flow was positive at EUR 2.6 million (USD $3.8 million). Earnings per share for the full year were EUR 0.17 (USD $0.25), adjusted for full dilution
Exel Sports Brands, the company’s sport division, continued to suffer from low sales caused by problems with the flow of products throughout the organization.
The company said in a statement, “At the beginning of November 2007, a new managing director was appointed to accomplish a turnaround. During the last quarter heavy measures were taken to align the organization to the present activity level, improve the sourcing and reduce the capital employed in terms of too high inventories. However, it will still require a lot of efforts and strong focus for Exel Sports Brands to return to acceptable profitability.”
Also, Exel’s board of directors appointed Vesa Korpimies as company president and CEO, starting April 10, taking over for Goran Jonsson. Korpimies has been with the company since 1987 and was most recently executive vice president and head of Exel Composites.
The board also proposed a dividend of EUR 0.20 (USD $0.29) per share.
(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of Feb. 27.)
Johnson Outdoors declares quarterly dividend
Johnson Outdoors’ (Nasdaq: JOUT) board of directors declared regular quarterly dividends of 5.5 cents per Class A share and 5 cents per Class B share. It said the dividends are payable April 24 to shareholders of record April 10.
Under Armour appoints CFO, COO
Under Armour (NYSE: UA) promoted Vice President of Accounting and Finance Brad Dickerson to chief financial officer, succeeding Wayne Marino who will become chief operating officer.
The chief operating position is newly created. Marino will head up the company’s operational, financial, administrative and strategic planning functions. He has served as executive vice president and CFO since March 2006.
Dickerson will work with Marino on strategic infrastructure investments and will be responsible for financial organization, the company said. He has served as vice president of accounting and finance since February 2006.
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