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Decker Brandscontinues to prove that it belongs among the elite of the niche retailers. This Zacks Rank #1 (Strong Buy) is hitting on all cylinders as it recently raised full year guidance for the second time this year.
Deckers Brands designs, manufactures and distributes footwear, apparel and accessories. It's most prominent brand is UGG, but it also owns Koolaburra, HOKA ONE ONE, Teva and Sanuk.
It's products are sold around the world in department and specialty stores as well as company-owned and operated retail stores. Deckers also operates an online store at deckers.com.
Another Beat in the Fiscal Second Quarter
On Oct 24, Deckers reported its fiscal second quarter results and beat the Zacks Consensus Estimate by $0.37. It reported earnings of $2.71 versus the Zacks Consensus of just $2.34.
It was Deckers' 11th consecutive earnings beat with its last miss in early 2017.
The HOKA ONE ONE brand remains the main driver of outperformance as second quarter sales jumped 49.9% to $78.1 million from $52.1 million a year ago.
UGG, it's largest brand, grew sales by 2.2% to $404.9 million from $396.3 million in the prior year's quarter.
Teva turned it around from the first quarter, as sales increased 6.7% to $23 million, up from $21.5 million in the same period last year.
Only Sanuk failed to grow sales, as they declined 22.4% to $10.7 million from $13.8 million a year ago.
Wholesale net sales grew 8.7% to $443.5 million compared to $408.0 million for the same period last year.
Direct to consumer (DTC) net sales for the second quarter increased 5.1% to $98.7 million compared to $93.9 million for the prior year. DTC comparable sales increased 7.2% over the same period last year.
Deckers saw better sales growth domestically, than internationally in the quarter. Domestic net sales roes 14.9% to $358 million while international net sales fell 3.2% in the second quarter to $184.2 million.
Raised Guidance Again
For the second time this year, Deckers raised its full year revenue and earnings guidance.
Revenue is now expected to be in the range of $2.115 billion to $2.140 billion up from prior guidance given in July of $2.1 billion to $2.125 billion.
It raised full year earnings guidance to a range of $8.90 to $9.05, up from its prior guidance of $8.40 to $8.60.
Not surprisingly, the analysts are bullish too. 5 estimates were revised higher in the last week pushing the Fiscal 2020 earnings to $9.07 from $8.72 over that time period.
That's earnings growth of just 2.6%, however, as the company made $8.84 last year.
They're bullish on next year too with Fiscal 2021 jumping to $9.99 from $9.67, which is another 10.1% growth.
Shares Tread Water: Is it a Buying Opportunity?
Given the magnitude of the beat, and that the company raised, you'd think the shares would rally but instead they've gone the other way since the earnings announcement.
Year-to-date they're up only 4.4% but that's after skyrocketing 124% over the past 2 years.
Is it being punished for being a growth stock?
Shares are trading with a forward P/E of just 16.6 which doesn't make them expensive compared to popular niche retail peers.
Bank OZKis managing in a difficult interest rate environment. This Zacks Rank #5 (Strong Sell) is well-known for its incredible credit discipline.
Bank OZK is a regional bank headquartered in Little Rock, Arkansas. It has operations throughout the US including in Arkansas, Georgia, Florida, North Carolina, Texas, Alabama, South Carolina, California, New York and Mississippi.
The bank is well-known for its condo and apartment lending.
A Third Quarter Miss
On Oct 17, Bank OZK reported its third quarter results and missed on the Zacks Consensus Estimate by $0.02.
Earnings were $0.81 versus the consensus of $0.83. It was the second earnings miss in a row.
Total loans rose 6% to $17.73 billion from $16.73 billion a year ago.
Deposits increased 3.5% to $18.44 billion from $17.82 billion.
Credit quality remained good. For the third quarter, the annualized net charge-off ratios for non-purchased loans were just 0.07%. Excluding purchased loans, the ratio of nonperforming loans to total loans was 0.17%.
Earnings Estimates Cut
No bank can get away from the Fed's interest rate cuts this year. With the Fed poised to cut again in October, and possibly several more times before the first half of 2020, the bank earnings are taking a slide.
4 analysts cut 2019 and 2020 estimates in the last month, with 2 cutting in just the last week.
The 2019 Zacks Consensus Estimate has fallen to $3.32 from $3.36 in the last month. That's earnings growth of just 2.5% over the prior year as Bank OZK made $3.24.
2020 is looking similar.
The 2020 Zacks Consensus has fallen to $3.06 from $3.19 over the past 30 days, an earnings decline of 7.7%.
Shares are Cheap
The bank stocks have under performed in 2019 given all the rate cut challenges. Bank OZK shares are down 5.5% year-to-date.
They're now trading with a forward P/E of just 8.8 and a price-to-book ratio of 0.9. A P/B ratio under 1.0 usually indicates value.
Bank OZK does pay a dividend, currently yielding 3.4%, to reward shareholders for their patience.
On a day that saw the S&P 500 close at an all-time high yesterday afternoon, Alphabet, the parent company of Google, reported mixed results in its Q3 earnings report. Earnings of $10.12 per share badly missed estimates of $12.57 per share, which itself was down more than 3.5% year over year. Revenues, on the other hand, got to $33 billion in the quarter (subtracting Traffic Acquisition Costs, or TAC; Google's top-line headline number was $40.50 billion), better than the $32.84 billion in the Zacks consensus. And that $33 billion represents growth of 20% year over year.
Shares are down 1.76% at this hour, as traders await the conference call from the behemoth Mountain View, CA company. Advertising revenues in the quarter rose 17% to $33.9 billion, Properties grew $28.6 billion and Cloud-based revenues reached $6.4 billion. Paid clicks were up 18% from a year ago, while cost-per-click fell 2%. The company has also made 20,000 new hires in the past year -- Alphabet now employs 114,096 people.
On the smaller side of things, Beyond Meat also posted Q3 earnings results after the closing bell Monday, beating on both top and bottom lines for the second-straight quarter: 6 cents per share topped estimates by a penny, while sales of $92 million outperformed the $82.56 million analysts were looking for. Yet shares are selling off 15% on the news, though this likely has more to do with the lockup period on share ownership expiring tomorrow.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Decker Brands, Bank OZK, Alphabet and Beyond Meat highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 29, 2019 – Zacks Equity Research Shares of Decker Brands (DECK - Free Report) as the Bull of the Day, Bank OZK (OZK - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Alphabet (GOOGL - Free Report) and Beyond Meat (BYND - Free Report) .
Here is a synopsis of all four stocks:
Bull of the Day:
Decker Brandscontinues to prove that it belongs among the elite of the niche retailers. This Zacks Rank #1 (Strong Buy) is hitting on all cylinders as it recently raised full year guidance for the second time this year.
Deckers Brands designs, manufactures and distributes footwear, apparel and accessories. It's most prominent brand is UGG, but it also owns Koolaburra, HOKA ONE ONE, Teva and Sanuk.
It's products are sold around the world in department and specialty stores as well as company-owned and operated retail stores. Deckers also operates an online store at deckers.com.
Another Beat in the Fiscal Second Quarter
On Oct 24, Deckers reported its fiscal second quarter results and beat the Zacks Consensus Estimate by $0.37. It reported earnings of $2.71 versus the Zacks Consensus of just $2.34.
It was Deckers' 11th consecutive earnings beat with its last miss in early 2017.
The HOKA ONE ONE brand remains the main driver of outperformance as second quarter sales jumped 49.9% to $78.1 million from $52.1 million a year ago.
UGG, it's largest brand, grew sales by 2.2% to $404.9 million from $396.3 million in the prior year's quarter.
Teva turned it around from the first quarter, as sales increased 6.7% to $23 million, up from $21.5 million in the same period last year.
Only Sanuk failed to grow sales, as they declined 22.4% to $10.7 million from $13.8 million a year ago.
Wholesale net sales grew 8.7% to $443.5 million compared to $408.0 million for the same period last year.
Direct to consumer (DTC) net sales for the second quarter increased 5.1% to $98.7 million compared to $93.9 million for the prior year. DTC comparable sales increased 7.2% over the same period last year.
Deckers saw better sales growth domestically, than internationally in the quarter. Domestic net sales roes 14.9% to $358 million while international net sales fell 3.2% in the second quarter to $184.2 million.
Raised Guidance Again
For the second time this year, Deckers raised its full year revenue and earnings guidance.
Revenue is now expected to be in the range of $2.115 billion to $2.140 billion up from prior guidance given in July of $2.1 billion to $2.125 billion.
It raised full year earnings guidance to a range of $8.90 to $9.05, up from its prior guidance of $8.40 to $8.60.
Not surprisingly, the analysts are bullish too. 5 estimates were revised higher in the last week pushing the Fiscal 2020 earnings to $9.07 from $8.72 over that time period.
That's earnings growth of just 2.6%, however, as the company made $8.84 last year.
They're bullish on next year too with Fiscal 2021 jumping to $9.99 from $9.67, which is another 10.1% growth.
Shares Tread Water: Is it a Buying Opportunity?
Given the magnitude of the beat, and that the company raised, you'd think the shares would rally but instead they've gone the other way since the earnings announcement.
Year-to-date they're up only 4.4% but that's after skyrocketing 124% over the past 2 years.
Is it being punished for being a growth stock?
Shares are trading with a forward P/E of just 16.6 which doesn't make them expensive compared to popular niche retail peers.
Bear of the Day:
Bank OZKis managing in a difficult interest rate environment. This Zacks Rank #5 (Strong Sell) is well-known for its incredible credit discipline.
Bank OZK is a regional bank headquartered in Little Rock, Arkansas. It has operations throughout the US including in Arkansas, Georgia, Florida, North Carolina, Texas, Alabama, South Carolina, California, New York and Mississippi.
The bank is well-known for its condo and apartment lending.
A Third Quarter Miss
On Oct 17, Bank OZK reported its third quarter results and missed on the Zacks Consensus Estimate by $0.02.
Earnings were $0.81 versus the consensus of $0.83. It was the second earnings miss in a row.
Total loans rose 6% to $17.73 billion from $16.73 billion a year ago.
Deposits increased 3.5% to $18.44 billion from $17.82 billion.
Credit quality remained good. For the third quarter, the annualized net charge-off ratios for non-purchased loans were just 0.07%. Excluding purchased loans, the ratio of nonperforming loans to total loans was 0.17%.
Earnings Estimates Cut
No bank can get away from the Fed's interest rate cuts this year. With the Fed poised to cut again in October, and possibly several more times before the first half of 2020, the bank earnings are taking a slide.
4 analysts cut 2019 and 2020 estimates in the last month, with 2 cutting in just the last week.
The 2019 Zacks Consensus Estimate has fallen to $3.32 from $3.36 in the last month. That's earnings growth of just 2.5% over the prior year as Bank OZK made $3.24.
2020 is looking similar.
The 2020 Zacks Consensus has fallen to $3.06 from $3.19 over the past 30 days, an earnings decline of 7.7%.
Shares are Cheap
The bank stocks have under performed in 2019 given all the rate cut challenges. Bank OZK shares are down 5.5% year-to-date.
They're now trading with a forward P/E of just 8.8 and a price-to-book ratio of 0.9. A P/B ratio under 1.0 usually indicates value.
Bank OZK does pay a dividend, currently yielding 3.4%, to reward shareholders for their patience.
Additional content:
Google (GOOGL - Free Report) Mixed, Beyond Meat (BYND - Free Report) Beats but Falls
On a day that saw the S&P 500 close at an all-time high yesterday afternoon, Alphabet, the parent company of Google, reported mixed results in its Q3 earnings report. Earnings of $10.12 per share badly missed estimates of $12.57 per share, which itself was down more than 3.5% year over year. Revenues, on the other hand, got to $33 billion in the quarter (subtracting Traffic Acquisition Costs, or TAC; Google's top-line headline number was $40.50 billion), better than the $32.84 billion in the Zacks consensus. And that $33 billion represents growth of 20% year over year.
Shares are down 1.76% at this hour, as traders await the conference call from the behemoth Mountain View, CA company. Advertising revenues in the quarter rose 17% to $33.9 billion, Properties grew $28.6 billion and Cloud-based revenues reached $6.4 billion. Paid clicks were up 18% from a year ago, while cost-per-click fell 2%. The company has also made 20,000 new hires in the past year -- Alphabet now employs 114,096 people.
On the smaller side of things, Beyond Meat also posted Q3 earnings results after the closing bell Monday, beating on both top and bottom lines for the second-straight quarter: 6 cents per share topped estimates by a penny, while sales of $92 million outperformed the $82.56 million analysts were looking for. Yet shares are selling off 15% on the news, though this likely has more to do with the lockup period on share ownership expiring tomorrow.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.