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Deckers Outdoor Corporation DECK continued with its better-than-expected bottom-line performance for the fifth straight quarter, as it reported first-quarter fiscal 2017 results. This footwear and apparel company posted narrower-than-expected loss of $1.80 per share for the quarter under review. Analysts polled by Zacks were expecting a loss of $2.05 per share, while management had earlier projected a loss of approximately $2.10–$2.20 per share for the quarter.

Despite faring better than analysts’ expectations and management’s own guidance on account of better-than-expected revenue, higher gross margin and the timing of certain expenses, loss widened from $1.43 per share reported in the year-ago quarter. 

Deckers Outdoor Corporation (DECK) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany

Net sales of this Goleta, CA-based company came in at $174.4 million, reflecting an 18.4% year-over-year fall. The top line, however, beat the Zacks Consensus Estimate of $168.8 million, thus surpassing the same for the second consecutive quarter. Moreover, the rate of decline was lower than 20%−25% expected by Deckers.

However, the decrease in the top line stemmed from the timing of order shipments between quarters, fall in Direct-to-Consumer (“DTC”) comparable sales and lower close-out sales. On a constant currency basis, net sales plummeted 18.8%.

Further, the company’s domestic net sales declined 18.6% to $109.5 million in the reported quarter. Also, international net sales plunged 18.2% to $64.9 million, while on a constant currency basis, the same fell 19.1%.

DTC net sales dropped 3.6% to $58.3 million, while on a constant currency basis, sales fell 3.8%. DTC comparable sales tumbled 7.3% year over year. On the other hand, Wholesale and distributor net sales in the reported quarter decreased 24.3% to $116.1 million, while on a constant currency basis, sales declined 24.6%.

Gross margin improved 320 basis points to 43.7% due to lower proportion of closeout sales, a higher percentage of sales from DTC and expansion of international margins.

Deckers is focused on expanding its brand assortments, bringing more innovative line of products such as the launch of the Arrowood collection of sneaker boots, targeting consumers digitally via marketing and sturdy eCommerce, and optimizing omni-channel distribution. The company is witnessing huge success with the yoga sling collection and favorable response for men's casual styles.

Management hinted that like other brick-and-mortar locations, the company’s outlets are also witnessing lower traffic. Moreover, it said that sustained promotion of classics to make way for the new classic hurt the top line and also resulted in negative comparable sales. With respect to the store fleet optimization plan that focuses on striking the right balance between digital and physical stores, during the quarter Deckers shuttered 6 of the approximately 21 outlets identified for closure during fiscal 2017.