GOLETA, Calif. -- Shoppers are tugging off their Uggs, and the maker of the sheepskin boots said Thursday that profit fell 31 percent in its most recent quarter, and slashed its outlook for the end of the year.
The warning from Deckers Outdoor Corp., which also sells Teva shoes and sandals, comes just as the all-important holiday season kicks off. Uggs sheepskin boots and shoes have been perennial best sellers around the holidays despite their $200-plus price tag. But the company said two years of price increases to offset an 80 percent increase in sheepskin and other raw material costs has turned consumers off. Warmer weather contributed to waning demand for Uggs, Deckers suggested.
Revenue from Uggs, Deckers' largest brand, fell 12 percent to $332.8 million during the quarter.
In response, Uggs said it decided last month to roll back prices on some classic styles in the U.S. The price cuts are retroactive, meaning stores that received Uggs as far back as July can discount the merchandise remaining on their shelves for shoppers. It's an unusual move for Deckers, which rarely discounts Uggs.
Goleta, Calif.-based Deckers slashed its outlook for the current quarter due to the weak third quarter and its price cuts.
Net income for the three months ended Sept. 30 totaled $43.1 million, or $1.18 per share. That compares with $62.3 million, or $1.59 per share, last year. Analysts expected net income of $1.05 per share, according to FactSet.
Revenue fell 9 percent to $376.4 million from $414.4 million last year. Analysts expected $412.1 million.
Decker's smaller brands performed better than Uggs. Revenue from Teva sports sandals rose 22 percent to $17.9 million. Sanuk casual shoes revenue rose 18 percent to $18.3 million.
U.S. revenue rose 6 percent to $242.2 million. But that was offset by a 14 percent drop to $134.2 million internationally.
Deckers now expects fourth-quarter earnings will fall 14 percent, implying profit of $2.73 per share. Previously, they expected a 22 percent increase. Analysts expect $3.40 per share.
The company now expects fourth-quarter revenue will rise 6 percent, implying revenue of $640 million, from prior guidance of a 19 percent rise. Analysts expect $682.1 million.
The company expects profit for the entire year to drop by a third from last year. Deckers had previously expected a 9 to 10 percent decline.
For the year, the company expects net income to fall 33 percent from 2011, implying net income of $3.40 per share, from prior guidance of a 9 or 10 percent decline. It expects revenue to rise 5 percent in 2012, rather than 14 percent.
Shares fell 16 percent to $29.90 in aftermarket trading, after ending the day down $1.63, or 4.4 percent, at $35.49. Shares have lost about half their value since the beginning of the year.