Why Deckers Shares Soared
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What: Shares of Deckers Outdoor were stepping up to the next level today, climbing as much as 14% on a better-than-expected earnings report.
So what: The maker of Ugg boots and other footwear and accessories said that net income actually fell 23%, to $2.77 a share, but beat estimates of $2.57 a share. The formerly high-flying stock also raised investor confidence by saying that retail trends would improve this year, and it expected Ugg sales, which contributes the vast majority of revenue, to grow after a slight decline in 2012. For the quarter, revenue increased just 2%, to $617.3 million.
Now what: Sales in Q4 were boosted by the holiday shopping season and the seasonality of the wintry Ugg boots. For the first quarter, the company is actually forecasting a loss of $0.12 a share, and revenue below analyst estimates. Price increases for sheepskin and other raw materials have crunched margins, causing profits to fall even as sales remain flat. Investors clearly believe in a turnaround, but I'd like to see earnings moving in the right direction first.
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The article Why Deckers Shares Soared originally appeared on Fool.com.Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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