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Deckers Brands (DECK - Free Report) continues to operate at a high level as its brands, including UGG and HOKA, remain in demand. This Zacks Rank #1 (Strong Buy) is expected to grow sales by 13.6% in fiscal 2025.
Deckers Brands designs, markets, and distributes footwear, apparel and accessories for several brands including UGG, HOKA, Teva, Koolaburra and AHNU.
It sells in select department and specialty stores, company-owned and operated retail stores, and select online stores, including the company’s own websites in more than 50 countries and territories.
Big Beat in the Second Quarter of Fiscal 2025
On Oct 24, 2024, Deckers Brands reported its fiscal second quarter 2025 results and blew by the Zacks Consensus by $0.37. Earnings were $1.59 versus the consensus of $1.22.
It was the twelfth consecutive earnings surprise. Deckers has only missed once in the last 5 years. That’s an impressive record given that there was a pandemic in 2020.
Sales jumped 20.1% to $1.3 billion from $1.09 billion a year ago. Both direct-to-consumer (DTC) and Wholesale were strong. DTC net sales rose 19.9% to $397.7 million from $331.7 million.
While wholesale net sales rose 20.2% to $913.7 million from $760.2 million.
International was hotter than the United States. International sales jumped 33% to $457.4 million from $343.9 million a year ago. Domestic, or US sales, jumped “only” 14.2% to $853.9 million from $748 million.
Gross margin also jumped, rising to 55.9% from 53.4% last year.
Just a reminder that this quarter is NOT the holiday quarter where retailers often put it all on the line for the year.
HOKA Continues to see Exploding Growth
Deckers two largest brands are HOKA and UGG. Between them they saw over a billion in sales in the quarter.
HOKA is growing faster, as sales rose 34.7% to $570.9 million up from $424 million last year.
UGG, however, still saw 13% sales growth to $689.9 million from $610.5 million a year ago. UGG Is an established brand yet, it was still able to grow in the double digits.
Deckers smaller brands, including Teva and Sanuk, had mixed results. Teva sales rose 2.3% to $22 million from $21.5 million a year ago.
Sanuk sales decreased 47.6% to $2.8 million from $5.4 million last year but Deckers sold the brand on Aug 15, 2024.
A group of its other smaller brands, comprising mostly of Koolaburra, saw sales decline 15.8% to $25.8 million from $30.6 million.
Deckers Has a Pristine Balance Sheet
Everything is operating on all cylinders for Deckers. It recently completed a 6-for-1 stock split and has a new CEO.
It has cash, and cash equivalents, on hand of $1.226 billion which is up from $823.1 million a year ago.
Deckers has NO outstanding borrowings.
Its inventories are also stable at $777.9 million, up from $726.3 million last year.
No Dividend, But Deckers Has a Big Stock Buyback Program
Deckers has a lot of cash on hand, but it doesn’t pay a dividend. Instead, it has a large share buyback program.
During the second quarter, it bought back shares worth $104.3 million. As of Sep 30, 2024, the company had about $685.4 million remaining under its stock repurchase authorization.
Analysts Raise Full Year Earnings Estimates
Given all the good news, and yet another big earnings beat, it is not a surprise that the company raised its full year earnings guidance to a range of $5.15 to $5.25. The analysts followed suit.
10 estimates were raised for fiscal 2025 in the last 30 days and one in the last week which pushed up the Zacks Consensus to $5.47 from $5.28 30 days ago. That is well above the high end of the company’s guidance range of $5.25.
It is also earnings growth of 12.6% as the company made $4.86 last year.
Here’s what it looks like on the price and consensus chart.
Image Source: Zacks Investment Research
Shares Up Big in 2024
Shares of Deckers hit new highs earlier in the year and then pulled back. But they’re close to breaking out again.
Deckers is up more than double the S&P 500 year-to-date.
Image Source: Zacks Investment Research
For a growth stock, it’s still attractive. It trades with a price-to-earnings (P/E) ratio of 32.4.
For investors looking for a red-hot retail and shoe stock, Deckers is one to keep on the short list.
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Bull of the Day: Deckers Brands (DECK)
Deckers Brands (DECK - Free Report) continues to operate at a high level as its brands, including UGG and HOKA, remain in demand. This Zacks Rank #1 (Strong Buy) is expected to grow sales by 13.6% in fiscal 2025.
Deckers Brands designs, markets, and distributes footwear, apparel and accessories for several brands including UGG, HOKA, Teva, Koolaburra and AHNU.
It sells in select department and specialty stores, company-owned and operated retail stores, and select online stores, including the company’s own websites in more than 50 countries and territories.
Big Beat in the Second Quarter of Fiscal 2025
On Oct 24, 2024, Deckers Brands reported its fiscal second quarter 2025 results and blew by the Zacks Consensus by $0.37. Earnings were $1.59 versus the consensus of $1.22.
It was the twelfth consecutive earnings surprise. Deckers has only missed once in the last 5 years. That’s an impressive record given that there was a pandemic in 2020.
Sales jumped 20.1% to $1.3 billion from $1.09 billion a year ago. Both direct-to-consumer (DTC) and Wholesale were strong. DTC net sales rose 19.9% to $397.7 million from $331.7 million.
While wholesale net sales rose 20.2% to $913.7 million from $760.2 million.
International was hotter than the United States. International sales jumped 33% to $457.4 million from $343.9 million a year ago. Domestic, or US sales, jumped “only” 14.2% to $853.9 million from $748 million.
Gross margin also jumped, rising to 55.9% from 53.4% last year.
Just a reminder that this quarter is NOT the holiday quarter where retailers often put it all on the line for the year.
HOKA Continues to see Exploding Growth
Deckers two largest brands are HOKA and UGG. Between them they saw over a billion in sales in the quarter.
HOKA is growing faster, as sales rose 34.7% to $570.9 million up from $424 million last year.
UGG, however, still saw 13% sales growth to $689.9 million from $610.5 million a year ago. UGG Is an established brand yet, it was still able to grow in the double digits.
Deckers smaller brands, including Teva and Sanuk, had mixed results. Teva sales rose 2.3% to $22 million from $21.5 million a year ago.
Sanuk sales decreased 47.6% to $2.8 million from $5.4 million last year but Deckers sold the brand on Aug 15, 2024.
A group of its other smaller brands, comprising mostly of Koolaburra, saw sales decline 15.8% to $25.8 million from $30.6 million.
Deckers Has a Pristine Balance Sheet
Everything is operating on all cylinders for Deckers. It recently completed a 6-for-1 stock split and has a new CEO.
It has cash, and cash equivalents, on hand of $1.226 billion which is up from $823.1 million a year ago.
Deckers has NO outstanding borrowings.
Its inventories are also stable at $777.9 million, up from $726.3 million last year.
No Dividend, But Deckers Has a Big Stock Buyback Program
Deckers has a lot of cash on hand, but it doesn’t pay a dividend. Instead, it has a large share buyback program.
During the second quarter, it bought back shares worth $104.3 million. As of Sep 30, 2024, the company had about $685.4 million remaining under its stock repurchase authorization.
Analysts Raise Full Year Earnings Estimates
Given all the good news, and yet another big earnings beat, it is not a surprise that the company raised its full year earnings guidance to a range of $5.15 to $5.25. The analysts followed suit.
10 estimates were raised for fiscal 2025 in the last 30 days and one in the last week which pushed up the Zacks Consensus to $5.47 from $5.28 30 days ago. That is well above the high end of the company’s guidance range of $5.25.
It is also earnings growth of 12.6% as the company made $4.86 last year.
Here’s what it looks like on the price and consensus chart.
Image Source: Zacks Investment Research
Shares Up Big in 2024
Shares of Deckers hit new highs earlier in the year and then pulled back. But they’re close to breaking out again.
Deckers is up more than double the S&P 500 year-to-date.
Image Source: Zacks Investment Research
For a growth stock, it’s still attractive. It trades with a price-to-earnings (P/E) ratio of 32.4.
For investors looking for a red-hot retail and shoe stock, Deckers is one to keep on the short list.