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Can Deckers & Wolverine Soar Even Higher Post a 52-Week High?

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The Shoes and Retail Apparel industry displayed a bull run last year. While the industry advanced 21.3%, the S&P 500 gained 19% over the said time frame. Two players in this industry — Deckers Outdoor Corporation (DECK - Free Report) and Wolverine World Wide, Inc. (WWW - Free Report) — have outpaced this trend as well, with a respective rally of 39.5% and 45.5% in a year’s time. Apart from benefiting from their strategic endeavors, we expect these stocks are poised to gain from a buoyant U.S. economy.

Consequently, shares of Deckers and Wolverine have hit a 52-week high on Dec 29. Both the companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



Let’s take a look at the two companies’ growth strategies that are aiding them to outperform the industry.

What’s Pushing Deckers’ Shares Higher?

Shares of Deckers have hit a 52-week high of $80.96 on Friday, closing marginally lower at $80.25. The company looks appeasing driven by its robust omni-channel endeavors, solid restructuring plan and other growth strategies. In fact, a Momentum Score of A and a long-term earnings growth rate of 10.7% further raise optimism in the stock.

Keeping pace with the changing trends, Deckers has been constantly developing its e-commerce portal to capture incremental sales. Moreover, it is focused on opening smaller concept omni-channel outlets and expanding programs, besides making new additions to its portfolio.

In an effort to drive long-term growth, management has also undertaken strategic initiatives. We believe the company’s focus on expanding its brand assortments, bringing more innovative line of products, targeting consumers digitally and optimizing omni-channel distribution are encouraging.

Additionally, analysts are steadily growing bullish on the stock as evident from the uptrend in the earnings estimates. The Zacks Consensus Estimate of $4.34 for fiscal 2018 and $5.01 for fiscal 2019 has moved up 4 cents and 5 cents, respectively, over the past seven days. Also, the estimate for the third-quarter fiscal 2018 has climbed 3 cents to $3.82 in the same time frame.

Driven by its robust growth strategies and better-than-anticipated second-quarter results, management raised its fiscal 2018 guidance. Earnings are envisioned between $4.15 and $4.30 per share, up from $3.95-$4.15 projected earlier.

What’s Driving Wolverine’s Shares?

Although shares of Wolverine have hit a 52-week high of $32.05 on Dec 29, it closed a tad lower at $31.88. In fact, the company has been putting up a stellar show buoyed by its solid strategic transformation plan — the WOLVERINE WAY FORWARD — as well as other robust growth endeavors and an impressive earnings history.

The company’s WOLVERINE WAY FORWARD initiative focuses on strengthening product innovations, developing more consumer-centric approach, enhancing geographical foothold as well as delivering persistent organic growth amid a fast-changing global retail and consumer environment. Also, management intends to develop digital infrastructure and has been taking other initiatives to boost e-commerce growth.

Driven by its strategic endeavors, Wolverine boasts a robust surprise history. In third-quarter 2017, the company delivered eighth straight quarter of positive earnings surprise with four consecutive sales beat. Also, it has recorded an average beat of 21.8% in the trailing four quarters. The company’s long-term earnings growth rate of 12.5% further bolsters investors’ confidence.

Other Stocks That Scaled 52-Week High

Some other top-ranked stocks that have also hit a 52-week high on Dec 29  are Constellation Brands, Inc. (STZ - Free Report) and Burlington Stores, Inc. (BURL - Free Report) , both carrying a Zacks Rank #2.

Constellation Brands with a long-term earnings growth rate of 18.4% has delivered an average positive earnings surprise of 13.6% in the trailing four quarters.

Burlington Stores with a long-term earnings growth rate of 17.5% has pulled off an average positive earnings surprise of 15.2% in the last four quarters.

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