Deckers Wipes Out; All But Eliminates the Specter of Profit

They blamed the dollar, the weather and whatever else they could conjure up to mask incompetence. They just lowered guidance from 0.57 to 0.07, ok. Margins are eroding. Sales are declining. This company is toast and so are their ridiculous furry boots.

Reports Q3 (Dec) earnings of $4.78 per share, $0.03 better than the Capital IQ Consensus of $4.75; revenues rose 1.4% year/year to $795.9 mln vs the $832.94 mln Capital IQ Consensus.
Reports Q3 gross margin of 49.1% vs 52% prior guidance, ~51% estimate and 52.9% year ago

The decline in gross margin was driven by greater than planned promotional activity and a 110 basis point impact from foreign exchange headwinds caused by the strengthening of the U.S. Dollar.

Co issues downside guidance for Q4, sees EPS of $0.07 vs $0.57 prior guidance and $0.39 CapIQ consensus; revs growth +7.2% vs +18% prior guidance and +13.5% to $387 mln consensus. DECK Q4 guidance is based on gross profit margin of 45.5% vs 44.7% year ago and ~46% estimate.

“Our third quarter was more challenging than we expected as warm weather and weak store traffic across retail pressured demand.”

We need moar rate hikes.