Northern, WI  9/25/2012 (BasicsMedia)  —   Decker (NASDAQ:DECK): I know you cannot blame the entire quarterly miss on Tom Brady, but I need to throw the marketing person under the bus who wanted to hang out with the Brady’s glam.  It was an error in judgement expecting that you would see Tom and Giselle padding around Manhattan in a pair of his and her UGG Boots and that would prompt sales.  It was a total over throw.

Lets look at the stock for a moment and understand that a year ago the stock was trading near $118 p/s and today it is 67% off this high today at $39 p/s after a recent miss.   The company offers luxury footwear and other items under the UGG brand name; open and closed-toe outdoor lifestyle footwear under the Teva brand name; action sport footwear under the Sanuk brand name; high-end casual footwear for men and women under the TSUBO brand name; outdoor performance and lifestyle footwear under the Ahnu brand name; and work footwear under the MOZO brand name.

Clearly Decker is more than UGG’s, but has demand for shoes and boots fallen that much in 2012?  I don’t think so.  The entire sector would be getting crushed if that were the case.  The problems started with a letter from the company talking about Sheepskin prices falling and a subsequent lower pricing for UGG Boots.  In a note to investors on Wednesday, Sterne Agee analyst Sam Poser said retailers have received a letter from Deckers Outdoor that due to 2013 sheepskin prices, the company is cutting prices on its Classic Ugg styles.  Which is a total bullshit reason to lower prices.  It is an insult to any analyst’s intelligence.

Effective Saturday, Sept., 15, the tall boot is going to $195.20 from $210 and the short boot will sell for $155.30 from $165, along with other price reductions. On Monday Ugg’s classic style and 37 other Ugg styles appeared on during a flash sale on Saturday and Sunday.

A company’s profit margins — the amount of each dollar of revenue a company actually keeps — are eroded if products go on sale or the price is reduced. Deckers Outdoor also makes Simple, Teva and Tsubo shoes, but its Uggs sheepskin boots have been popular sellers during the holidays for years. They are known for rarely, if ever, going on sale from their full price of upward of $200.

All I know is I am running a fly pattern to buy a pair of discounted UGGS so I can date a super model !!!!


Disclaimer:  We have no position in UGGS or Decker or with the Brady’s 

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