Ugg boots maker Deckers cuts outlook after a weak 3rd quarter; Shares sink aftermarket

IndustriesAssociated Press

Shares of Ugg boots maker Deckers are getting, well, the boot.

The stock sank Thursday after the company, which also makes Teva sandals and other shoes, cut its outlook and its holiday quarter came in weak.

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The Ugg brand's sales grew 6.5 percent to $736 million in the fiscal third quarter, driven by higher online and international sales as well as newly opened stores. But in the U.S., sales to department stores and other retailers that carry the brand declined, as did a sales measure for the company's own, established stores.

A slow October and November hurt sales of the core Classic Ugg styles, said Deckers CEO Angel Martinez.

He said that different styles, such as "weather boots" and "casual boots," sold at full-price more than the company had expected — a good sign — and that Deckers' efforts to diversify its business with new shoe styles were doing well.

Still, the Goleta, California-based company cut its view for sales growth in the Ugg brand for this year, to 11 percent from 14 percent.

Deckers Outdoor Corp. said it now expects to break even for the current quarter, its fiscal fourth, mostly due to changes in foreign exchange rates. It had previously predicted profit of 15 cents per share, and analysts polled by FactSet called for 13 cents per share.

Overall for the third quarter, which ran from October-December, profit came to $156.7 million, or $4.50 per share. Analysts surveyed by Zacks Investment Research predicted $4.52 per share.

Sales were $784.7 million, short of Wall Street's estimate of $811.4 million, according to Zacks.

Deckers stock slid 14 percent to $71 in after-hours trading. The shares have gained 10 percent in the past 12 months, closing at $82.27 Thursday.

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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on DECK at http://www.zacks.com/ap/DECK

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Keywords: Deckers, Earnings Report