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What: Shares of Deckers Outdoor (NYSE:DECK) were stepping up a notch today, gaining as much as 11% after the footwear-maker posted a better-than-expected first-quarter earnings report.
So what: The parent of Ugg sheepskin boots and other popular brands such as Teva and Sanuk said revenues shot up 24.3% in the quarter to $211.5 million, well ahead of estimates at $191 million, with solid growth across its three major brands. Despite the sales improvement, Deckers' net loss expanded as expenses grew line with revenue. As a result, the company posted a per-share loss of $1.07, but that still beat estimates of a $1.28 per-share loss. Deckers' business is highly seasonal as the majority of sales come from Ugg boots, which are popular in the colder months.
Now what: While the spring period is Deckers' slowest quarter of the year, the strong performance and early wholesale shipments of fall styles prompted management to lift full-year guidance. The company now sees revenue growth of 14% for the fiscal year, up from 13%, and expects EPS growth of 14.5%, better than the previous estimate at 13.5%. The top-line projection was better than analyst estimates of 13.2%, while EPS growth was slightly weaker. Because of the seasonality of the business, it may be difficult to infer future results from its performance in its weakest quarter, but I wouldn't be surprised to see the company lift its guidance again in its next report as revenue growth was projected to be much stronger than expected. Deckers has also delivered solid earnings beats in its last four quarters.