Easy Winter Means Tough Times for UGG

UGG Australia boots aren’t generally the things you want to pull on when the weather outside gets frightful, but the mild winter may have hurt overall sales in the last quarter for Deckers, the boot’s manufacturer.

SeekingAlpha.com opines that even though parent company Deckers owns other brands such as Teva and Sanuk, the company is made or broken on the success of UGG.

“We think the exceptionally mild weather created a tough selling environment, which dragged down sales and hurt pricing in the first quarter,” the site notes. “We also think some pent-up demand may accumulate because consumers didn't really have the opportunity to dress for the weather as much as they might in other years.”

The good thing is that Ugg boots are positioned as a classic — they don’t change too much year-to-year so whatever didn’t sell this winter can just be trotted out again next year. As SeekingAlpha points out, “UGG boots aren't merely a fad, but rather a staple of the American female's closet.”

Of course, UGG designs for men, too, as the brand's spring campaign and Tom Brady endorsement in the U.S. points out. And the brand offers more than just its iconic sheepskin boot.

All that doesn’t help Deckers at the moment.

The company’s first-quarter earnings were reported Thursday and they needed some help. Sales did go up 20% to $246 million in the first quarter, but earnings per share went in the other direction, falling 59% to $0.20. Deckers is expecting that to fall even more during the second quarter. 

The Mail reports that the company’s shares have fallen steadily since hitting a year-long high in the fall at $117.66. At the close of business Friday, it was $51.88.

Those boots may have been made for walking but Deckers surely would like them to be walking firmly in another direction, instead of the uphill climb they've been on recently.