A year or so ago, my girlfriend started dropping hints that she wanted a pair of funky-looking sheepskin boots for Christmas. Uggs were all the rage as they made guest appearances on hit TV shows, in trendy shopping areas, and on the feet of the glitterati. A fashionista at heart, my girl does pretty well picking out the latest fashion trends.

I should have realized that being ahead of the fashion curve could also be a profitable investment.

Longtime shareholders in Deckers Outdoor (NASDAQ:DECK), the distributor of the Australian-made Ugg boots, benefited handsomely as the ultra-comfortable footwear became the latest "it" item. Sales surged and the stock soared, rising from around $14 a share two years ago to a high of nearly $50 a share last December. Unfortunately, I never even realized Deckers distributed Ugg until the company was recommended in the pages of Motley Fool Hidden Gems.

Yet fashion has a way of being fickle, and what's hot this year is oftentimes not the next year. Ugg has exhibited some staying power, and the company has been trying to expand the brand by licensing the Ugg name on hats, gloves, scarves, and pocketbooks. All logical accessory extensions to be sure, though it was their comfort and ability to keep your feet warm that created the boots' primary attraction. Still, a concern I have is that Ugg is just a fad and it's close to running its course.

Which is why Deckers' earnings announcement due out in the next week or so should have some significance for shareholders, including me -- hey, better late than never. Analysts are expecting EPS of $0.60, which would beat last year's performance by 30% and be difficult to meet if the Ugg brand has not been pulling its weight. But Deckers is more than a one-brand company. It also carries the respected Teva line of sandals, but a third line, Simple shoes, has had a tough time gaining traction and doesn't contribute all that much to the bottom line.

Sales for Ugg in the first half of the year are up 170% over the first half of 2004. The third quarter marks the start of the Ugg selling season and could portend how the rest of the year goes. But investors would do well to look at Teva's sales, too. Sales have been a bit flat thus far, and Teva's traditionally weak third quarter may not provide any relief. To wrap up the brands' recent revenue history, with dollars in millions:

Revenue $ 2005 2004 2003 2002 % Change 2005 2004 2003
Q1 18.8 2.6 1.2 .4 623.1 116.7 200
Q2 12.0 8.8 0.3 0.3 36.4 2833.3 0.0
Q3 * 35.2 13.8 9.8 * 155.1 40.8
Q4 * 55.2 19.3 13.0 * 186.0 48.5
Year-end * 101.8 34.6 23.5 * 194.2 47.2

Revenue $ 2005 2004 2003 2002 % Change 2005 2004 2002
Q1 38.4 36.5 31.1 29.3 5.2 17.4 6.1
Q2 22.9 25.3 21.1 19.5 (9.5) 19.9 8.2
Q3 * 10.7 7.9 5.7 * 35.4 38.6
Q4 * 11.0 12.7 10.3 * (13.4) 23.3
Year-end * 83.5 72.8 64.8 * 14.7 12.3

Revenue $ 2005 2004 2003 2002 % Change 2005 2004 2002
Q1 2.1 1.5 2.7 3.6 40 (44.4) (25.0)
Q2 1.9 1.6 1.3 2.6 18.8 23.1 (50.0)
Q3 * 4.5 1.6 2.3 * 181.3 (30.4)
Q4 * 2.0 1.6 1.7 * 25.0 (5.9)
Year-end * 9.6 7.2 10.2 * 33.3 (29.4)

Decker's stock has taken some body blows of late, falling almost 60% since the start of the year. The price now sits about 30% lower than where it was recommended in Hidden Gems and the company faces some challenges: extending the Ugg line, repositioning Teva, controlling inventory, and finding an independent director to sit on the board (Deckers received a Nasdaq delisting notice last week).

A couple of months ago, my girlfriend told me that the new footwear trend is cowboy boots. I'm not sure there will be a definitive manufacturer of horse kicks to invest in, but considering its past performance and the promises of its brands, Deckers has some big shoes to fill.

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Fool contributor Rich Duprey owns shares in Deckers. The Motley Fool has a disclosure policy.