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Deckers (DECK) Surges 7.9%: Is This an Indication of Further Gains?

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Deckers (DECK - Free Report) shares ended the last trading session 7.9% higher at $335.76. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 7% loss over the past four weeks.

Shares of Deckers got a boost following the company’s sturdy fourth-quarter fiscal 2021 results. Both the top and the bottom lines not only outpaced the Zacks Consensus Estimate but also increased year over year. Impressively, management issued encouraging view for fiscal 2022. Quarterly results were backed by strength in the HOKA ONE ONE and UGG brands as well as solid gains from the direct-to-consumer channels.

Deckers posted quarterly earnings of $1.18 per share that handily beat the Zacks Consensus Estimate of 58 cents and also more than doubled the year-ago quarter’s earnings of 57 cents. Markedly, net sales surged 49.7% to $561.2 million during the reported quarter and also surpassed the Zacks Consensus Estimate of $438 million.

Stellar performance prompted management to provide an upbeat sales and earnings outlook for fiscal 2022. It projected net sales in the range of $2.95-$3 billion range, indicating a rise from $2.546 billion generated in fiscal 2021. Earnings per share are forecast in the bracket of $14.05-$14.65, suggesting growth from $13.47 reported last fiscal.

Price and Consensus

Price Consensus Chart for DECK

This maker of Ugg footwear is expected to post quarterly loss of $0.21 per share in its upcoming report, which represents a year-over-year change of +25%. Revenues are expected to be $352 million, up 24.3% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Deckers, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on DECK going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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