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Deckers' (DECK) Q4 Earnings: Will the Stock Disappoint?
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Deckers Outdoor Corp. (DECK - Free Report) , a leading designer, producer and brand manager of innovative, niche footwear and accessories, is slated to report fourth-quarter fiscal 2016 results on May 26. The big question facing investors is, whether the company will be able to deliver a positive earnings surprise in the quarter to be reported. In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by an average of 3.6%. Let’s see how things are shaping up for this announcement.
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that Deckers is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Deckers has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 6 cents. Moreover, the company carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors Influencing this Quarter
Although Deckers recorded better-than-expected third-quarter fiscal 2016 bottom-line results, its sales fell short of expectations. For the fourth quarter, Deckers envisions revenues to rise 7.9% on a constant currency basis and 7.2% on a reported basis. Management also expects fourth-quarter reported earnings of approximately 7 cents per share compared with 4 cents in the prior-year quarter.
Based on the dismal sales performance in the fiscal third quarter and expectations for the fourth quarter, management slashed its guidance for fiscal 2016. The company now projects constant-currency total revenue growth of 5% compared with 10.5% predicted earlier. On a reported basis, revenue is expected to rise 2.4% to $1.86 billion compared with the previous guidance of an 8% increase to $1.96 billion.
Management now projects constant-currency earnings for fiscal 2016 to rise 10.5% to $5.15 per share, compared with the previous guidance of 23% constant-currency growth to $5.73 per share. On a reported basis, earnings per share are expected to be $4.49, reflecting a year-over-year decline of 3.6%. The previous forecast was of an 11.2% increase to $5.18 per share.
Moreover, sluggish performance across the Sanuk brand poses a concern.
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
TiVo Inc. has an Earnings ESP of +25.00% and a Zacks Rank #1 (Strong Buy).
Best Buy Co., Inc. (BBY - Free Report) has an Earnings ESP of +2.86% and a Zacks Rank #2 (Buy).
DSW Inc. has an Earnings ESP of +2.17% and a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Deckers' (DECK) Q4 Earnings: Will the Stock Disappoint?
Deckers Outdoor Corp. (DECK - Free Report) , a leading designer, producer and brand manager of innovative, niche footwear and accessories, is slated to report fourth-quarter fiscal 2016 results on May 26. The big question facing investors is, whether the company will be able to deliver a positive earnings surprise in the quarter to be reported. In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by an average of 3.6%. Let’s see how things are shaping up for this announcement.
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that Deckers is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Deckers has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 6 cents. Moreover, the company carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors Influencing this Quarter
Although Deckers recorded better-than-expected third-quarter fiscal 2016 bottom-line results, its sales fell short of expectations. For the fourth quarter, Deckers envisions revenues to rise 7.9% on a constant currency basis and 7.2% on a reported basis. Management also expects fourth-quarter reported earnings of approximately 7 cents per share compared with 4 cents in the prior-year quarter.
Based on the dismal sales performance in the fiscal third quarter and expectations for the fourth quarter, management slashed its guidance for fiscal 2016. The company now projects constant-currency total revenue growth of 5% compared with 10.5% predicted earlier. On a reported basis, revenue is expected to rise 2.4% to $1.86 billion compared with the previous guidance of an 8% increase to $1.96 billion.
Management now projects constant-currency earnings for fiscal 2016 to rise 10.5% to $5.15 per share, compared with the previous guidance of 23% constant-currency growth to $5.73 per share. On a reported basis, earnings per share are expected to be $4.49, reflecting a year-over-year decline of 3.6%. The previous forecast was of an 11.2% increase to $5.18 per share.
Moreover, sluggish performance across the Sanuk brand poses a concern.
DECKERS OUTDOOR Price, Consensus and EPS Surprise
DECKERS OUTDOOR Price, Consensus and EPS Surprise | DECKERS OUTDOOR Quote
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
TiVo Inc. has an Earnings ESP of +25.00% and a Zacks Rank #1 (Strong Buy).
Best Buy Co., Inc. (BBY - Free Report) has an Earnings ESP of +2.86% and a Zacks Rank #2 (Buy).
DSW Inc. has an Earnings ESP of +2.17% and a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>