Ugg’s parent company sees sales surge with new strategy

Just in time for summer, Ugg boots are making a comeback.

Sort of.

Shares of Ugg’s parent, Deckers Brands, soared by 19 percent on Friday, to $67.21, after the company reported a day earlier stronger quarterly results than what analysts had expected.

Its strong results were quite a change from previous company headlines — which featured store closings and a new CEO.

Deckers also raised its outlook for the year, raising hopes that it might be acquired.

Last month, the $1.5 billion company said it was exploring “strategic alternatives” that could include a sale of the company.

Deckers reported its operating loss for its fiscal fourth quarter ended March 31 widened to $30.9 million from $27.9 million a year ago on a 2.4 percent decline in sales, to $369.5 million.

Analysts had forecast a steeper drop.

Sales of Uggs — which account for 80 percent of revenue — were down 1 percent for the quarter. The company expects sales to be down 2 percent to flat for fiscal 2018.

The difference maker for Decker is that the Uggs brand is now sold in 200 Macy’s stores and on Amazon, a new strategy announced late last year.

The better-than-expected sales performance will likely be temporary, said Susquehanna Financial Group analyst Sam Poser.

“They could get some backlash from the better retailers like Nordstrom that don’t want to see stuff in moderate distribution channels,” Poser said. “If Macy’s gets promotional, which they often do, it could send Ugg prices down.”

The bulky sheepskin boots and shoes, which were all the rage in the early 2000s, retail for about $195.


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