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Deckers ups EPS guidance for FY'18, gives Q4'18 outlook

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Deckers ups EPS guidance for FY'18, gives Q4'18 outlook

Footwear company Deckers Outdoor Corp. said Feb. 1 that it now expects adjusted diluted EPS for its fiscal year 2018 ending March 31 to be in the range of $5.37 to $5.42, up from the previous guidance range of $4.15 to $4.30.

The company announced its revised full-year guidance while reporting earnings results for its fiscal 2018 third quarter, ended Dec. 31, 2017. The S&P Capital IQ consensus normalized EPS estimate for the year is $5.43.

Deckers predicts that its FY'18 net sales will fall in the range of $1.87 billion to $1.88 billion and that its gross margin will be at approximately 49%, an increase from its previous guidance of 47.5%.

The retailer also announced the outlook for its fiscal fourth quarter ending March 31. The company expects fourth-quarter net sales in the range of $370 million to $375 million and an effective tax rate of approximately 32%. It also expects its adjusted diluted EPS to be in the range of 15 cents to 20 cents, while the S&P Capital IQ consensus normalized EPS estimate for the fourth quarter is 19 cents.

For its third quarter ended Dec. 31, 2017, the footwear company reported net income of $86.34 million on a GAAP basis, compared to $41.03 million in the same quarter a year earlier. Diluted EPS was $2.69 in the quarter below the $1.27 in the same period a year ago and lower than the $3.87 mean consensus estimate compiled by S&P Capital IQ. Adjusted EPS was $4.97, higher than the $4.11 EPS it reported in the same quarter a year ago and above the S&P Capital IQ consensus normalized EPS estimate of $3.82 for the quarter. The retailer added that its EPS was affected by the recently enacted tax legislation.

Net sales increased 6.6% to $810.5 million from $760.3 million for the same period a year ago. Adjusted operating income was at $203.1 million, an increase from the prior-year period's $182.2 million.

President and CEO Dave Powers said the company's performance for its third quarter exceeded expectations: "Our refined product strategies, enhanced consumer messaging and wholesale account optimization efforts resulted in much stronger full-price selling for our brand portfolio during the key holiday season. ... Looking ahead, I am confident that the successful execution of our profit improvement plan, combined with the recently passed tax reform, has Deckers in a great position to deliver increased value to our shareholders in the years ahead."