Deckers Profits and Sales Take a Hit as Stores Remain Shuttered

Samantha McDonald

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Deckers Brands has become the latest retailer to absorb a dent in its balance sheet due to the coronavirus pandemic.

The Goleta, Calif.-based company — parent to Ugg and Hoka One One — posted fourth-quarter earnings per share of 57 cents, compared with last year’s EPS of 82 cents. Revenues for the three months ended March 31 declined 4.9% to $374.9 million.

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As the COVID-19 outbreak took hold in the United States, Deckers’ domestic sales fell 8.4% to $230.8 million. Internationally, sales climbed 1.4% to $144.1 million.

Its North America stores temporarily shuttered in mid-March, and the majority of those locations remain closed today. Those that have recently reopened, said the retailer, are operating at limited capacity. (Its distribution center in Moreno Valley, Calif., is currently back in business but also operating in a limited capacity.)

During the fourth quarter, Hoka One One continued to outshine sister labels Ugg, Teva and Sanuk: The athletic shoe brand’s sales increased 51.8% to $101.9 million. Sales at Ugg, which still raked in the lion’s share of revenues at Deckers, dropped 17.9% to $196.3 million, while Teva sales jumped 12.5% to $59.6 million and Sanuk sales were down 57.8% to $13.3 million.

For the full year, Deckers’ earnings per share amounted to $9.62, compared with last year’s $8.84 a share, while revenues improved 5.6% to $2.13 billion. Due to uncertainties around the impact of the COVID-19 health crisis on its business, the company opted against providing an outlook for the 2021 fiscal year.

“We expect fiscal year 2021 results to be impacted depending on the duration and severity of the COVID-19 pandemic,” Powers added, “but our in-demand brands, omni-channel capabilities and healthy balance sheet position us well to weather this challenging environment.”

At the end of March, the company had liquidity of more than $1 billion, including $649.4 million in cash and equivalents as well as $469.5 million under its revolving credit facilities. It did not have any outstanding borrowings.

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