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Here's Why Deckers (DECK) Stock is Worth Betting on Now

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Shares of Deckers Outdoor Corporation (DECK - Free Report) have outpaced the industry in a year's time. In the past one year, shares of this Goleta, CA-based company have increased approximately 29%, significantly outperforming the industry’s growth of 6.4%. The company’s focus on expanding brand assortments, introducing more innovative line of products, targeting consumers digitally through marketing and sturdy e-commerce along with optimizing omni-channel distribution bode well.

These enabled Deckers to commence fiscal 2020 on a strong note, wherein both the top line and the bottom line beat the Zacks Consensus Estimate and improved year-over-year. Markedly, better-than-expected results prompted management to lift fiscal 2020 view. For fiscal 2020, net sales are estimated in the band of $2.100-$2.125 billion, which indicate year-over-year growth of about 4-5%. The company had earlier guided net sales between $2.095 billion and $2.120 billion for fiscal 2020.



Let’s take a closer look at the aspects driving this Zacks Rank #1 (Strong Buy) stock. You can see the complete list of today’s Zacks #1 Rank stocks here.

Strategic Efforts Bode Well
 
Deckers is focusing on product and marketing strategies that are more skewed toward customers and in this respect it is implementing customer relationship management software and concentrating on loyalty program. Moreover, the company is focusing on expanding its product categories according to the customer purchasing trends. In order to capture incremental sales and margins, it is selling directly to wholesale customers.

Also, the company is constantly developing its e-commerce portal to capture incremental sales. Deckers has made substantial investments to strengthen its online presence and improve shopping experience for its customers. Its focus on expanding programs — Retail Inventory Online; Infinite UGG; Buy Online, Return In Store; and Click and Collect — to enhance customers’ shopping experience is an added positive.

Additionally, the company is undertaking efforts to bolster its portfolio. It is making marketing investments to build brand awareness of HOKA ONE ONE and UGG Men’s and UGG Women’s non-core category. Impressive performance across HOKA ONE ONE and Koolaburra brands aided results. The first-quarter results also gained from earlier delivery of wholesale and distributor shipments in the UGG brand and strong performance across HOKA ONE ONE brand driven by the launch of Carbon X.

Deckers now anticipates second-quarter net sales in the range of $515-$525 million. In the year-ago period, the company had reported $501.9 million net sales. Management expects revenues from HOKA ONE ONE brand to increase in the high 30% range for the year.

All said, we are optimistic that Deckers’ growth plans will help keep its stellar show on.

Other Key Picks

Skechers U.S.A., Inc. (SKX - Free Report) delivered average positive earnings surprise of 24.6% in the trailing four quarters. It has a long-term earnings growth rate of 15% and flaunts a Zacks Rank #1.

Target Corporation (TGT - Free Report) has a long-term earnings growth rate of 7.1% and a Zacks Rank #2 (Buy).

Rocky Brands, Inc. (RCKY - Free Report) delivered average positive earnings surprise of 15.6% in the trailing four quarters. Currently, it carries a Zacks Rank #2.

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