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Deckers (DECK) to Report Q3 Earnings: Factors to Consider

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Deckers Outdoor Corporation (DECK - Free Report) is likely to register an increase in the top line when it reports third-quarter fiscal 2022 earnings results on Feb 3, after the market closes. The Zacks Consensus Estimate for revenues is pegged at $1,185 million, indicating an improvement of 9.9% from the prior-year reported figure.

The bottom line of this designer, marketer and distributor of footwear, apparel, and accessories is expected to decline year over year. Although the Zacks Consensus Estimate for third-quarter earnings per share has increased by a penny to $8.26 over the past 30 days, the figure suggests a decline of 8.1% from the year-ago period. In the last reported quarter, this Goleta, CA-based company’s bottom line missed the Zacks Consensus Estimate by 0.5%.

Key Factors to Note

Deckers’ third-quarter performance is likely to have benefited from acceleration of omni-channel capabilities, customer-centric product and marketing strategies. The company’s focus on expanding brand assortments, introducing an innovative line of products and enhancing direct-to-consumer business contribution, might have acted as tailwinds. Additional production lines in new geographic locations and strategic price increases of products to offset input cost pressure are likely to have supported the top line in the quarter to be reported.

Keeping pace with the changing trends, Deckers has been constantly developing its e-commerce portal to capture incremental sales. The company has been making substantial investments to strengthen its online presence and enhance shopping experience.

We note that the Zacks Consensus Estimate for third-quarter sales at UGG, HOKA ONE ONE and Teva brands are pegged at $910 million, $201 million and $16.5 million, indicating an increase of 3.8%, 41.9% and 5.1%, respectively. The Zacks Consensus Estimate for sales at Sanuk brand is pegged at $6.7 million, suggesting a decline of 4.3% from the year-ago period.

While aforementioned factors raise optimism, we cannot rule out operational headwinds owing to container shortages, port congestion, and trucking scarcity that might have led to shipping delays and a greater usage of air freight. Also, any increase in marketing expenses and logistics costs as well as higher usage of air freight might have put pressure on margins.

Deckers Outdoor Corporation Price, Consensus and EPS Surprise

Deckers Outdoor Corporation Price, Consensus and EPS Surprise

Deckers Outdoor Corporation price-consensus-eps-surprise-chart | Deckers Outdoor Corporation Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Deckers this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Deckers has a Zacks Rank #3 and an Earnings ESP of +1.05%.

3 More Stocks With Favorable Combination

Here are three other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:

Macy's (M - Free Report) currently has an Earnings ESP of +7.71% and a Zacks Rank #1. The company is likely to register bottom-line improvement when it reports fourth-quarter fiscal 2021 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $1.97 suggests a substantial improvement from 80 cents reported in the year-ago quarter.

Macy's top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $8.44 billion, which indicates an improvement of 24.5% from the prior-year quarter. M has a trailing four-quarter earnings surprise of 313.5%, on average.

Tapestry (TPR - Free Report) currently has an Earnings ESP of +0.85% and a Zacks Rank #2. The company is likely to register an increase in the bottom line when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $1.18 suggests an increase of 2.6% from the year-ago reported number.

Tapestry’s top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.99 billion, which suggests an improvement of 17.8% from the prior-year quarter. TPR has a trailing four-quarter earnings surprise of 29%, on average.

Target (TGT - Free Report) currently has an Earnings ESP of +0.50% and a Zacks Rank #3. The company is expected to register bottom-line growth when it reports fourth-quarter fiscal 2021 results. The Zacks Consensus Estimate for quarterly earnings per share of $2.85 suggests growth of 6.7% from the year-ago quarter’s reported figure.

Target’s top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $31.53 billion, indicating an increase of 11.3% from the year-ago quarter. TGT has a trailing four-quarter earnings surprise of 19.7%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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