SportsOneSource Media     Posted: 10/25/2007

Deckers Outdoor Corp. saw a 57.2% jump in third quarter sales to $129.4 million from $82.3 million last year. Diluted EPS increased 81.5% to $1.47 from 81 cents, as restated, and ahead of previous guidance of approximately $1.20. UGG sales increased 67.5% to $113.7 million; Teva‘s increased 12.1% to $11.2 million. Simple sales were flat at $4.4 million.

Angel Martinez, president and CEO, said, “Our record third quarter performance was driven by strong full price selling of UGG brand product throughout the United States coupled with growing demand for the brand overseas. Consumer reaction to the UGG brand’s fall line has been extremely favorable which we believe underscores the progress we have made evolving the product offering, increasing the breadth and depth of each collection and enhancing the brand‘s image as the leader in luxury comfort. In addition, our success at penetrating new geographic regions, increasing shelf space and broadening our target market also contributed to our better than expected results. We move forward with positive momentum in our business, a solid infrastructure to support our growth objectives both domestically and overseas, and a long-term strategic development plan designed to maximize the opportunities for each of our leading brands.”

Segment Summary

UGG

??UGG Brand net sales for the third quarter increased 67.5% to $113.7 million compared to $67.9 million in the third quarter of 2006. Domestic sales were fueled by robust consumer demand for the entire product line, including boots, slippers, casuals, men’s, kids‘, and the new high-end fashion collection, coupled with strong international growth.

Teva

Teva Brand net sales for the third quarter increased 12.1% to $11.2 million compared to $10.0 million for the same period last year. Teva’s results were driven by increased sell-through for sandals as well as the positive reaction to the brand‘s expanded closed-toe product offering.

Simple

Simple Brand net sales were $4.4 million for both the third quarter of 2007 and the third quarter of 2006. Simple’s performance was negatively impacted by shipping delays for ecoSNEAKS as a result of production issues, which have been resolved. Despite this, ecoSNEAKS was said to have had a “very solid debut” across multiple channels of distribution, while Green Toe was successful in opening more mainstream accounts this fall.

Consumer Direct

Sales for the Consumer Direct business, which are included in the brand sales numbers above, increased 82.3% to $10.6 million compared to $5.8 million for the same period a year ago, mostly due to an increase in UGG Brand internet sales. In addition, results for the third quarter of 2007 included sales from the company‘s UGG Brand flagship store in New York City and two retail outlet stores in Riverhead and Woodbury Common, New York, which were not in operation in the third quarter of 2006.

Full-Year 2007 Outlook

The company is increasing its 2007 full year revenue growth target to approximately 39% over 2006, up from previous guidance of approximately 35%.

The company is increasing its 2007 full year diluted earnings per share growth target to approximately 35% over 2006 before the restatement adjustments as disclosed in the company’s Form 10-K/A for the year ended December 31, 2006 and the $15.3 million pre-tax impairment loss attributable to our Teva trademark that was recorded in the fourth quarter of 2006, up from previous guidance of approximately 25%.

Fiscal 2007 guidance includes approximately $5.3 million of stock compensation expense, an increase of $3.2 million over 2006, and approximately $2.4 million of expenses related to the investigation and restatement of the company‘s consolidated financial statements.

Fourth Quarter Outlook

The company is also increasing its fourth quarter 2007 revenue target to approximately 35% and its diluted earnings per share target to approximately 15% compared to the fourth quarter of 2006, before the restatement adjustment and impairment charge. This is up from its previous revenue and diluted earnings per share growth targets of 30% and 10%, respectively.