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Deckers (DECK) Thrives on Its HOKA Brand and DTC Growth
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Deckers Outdoor Corporation’s (DECK - Free Report) strategic vision demonstrates a commitment to not only growing its existing brands but also diversifying and innovating to remain competitive in the dynamic world of footwear, apparel and accessories.
The company is committed to building HOKA into a major player in the performance athletic market to reach multi-billion-dollar revenue levels. This ambition likely involves continued product innovation, expanding market share and leveraging HOKA's strong brand identity. The HOKA brand exhibited exceptional growth, with net sales increasing 27.4% to $420.5 million in the first quarter of fiscal 2024.
The HOKA brand is expected to rise more than 20% in fiscal 2024, with most of the increase likely to come from the brand's DTC business. UGG’s revenues are anticipated to rise in the low-single digits, backed by international expansion and gains from DTC.
Image Source: Zacks Investment Research
The company emphasizes profitable and underpenetrated markets through product innovation, and store expansion. Its primary focus now is perfecting the in-store consumer experience, ensuring that it aligns seamlessly with its brand ethos and meets evolving customer expectations.
The company is also focusing on enhancing its direct-to-consumer (DTC) business model. DTC net sales rose 35.3% to $250.4 million, while comparable DTC net sales jumped 33.4% in the first quarter of fiscal 2024.
Deckers is evidently adapting to evolving market trends by actively developing its e-commerce platform to capture additional sales opportunities. The company has been making significant investments to strengthen its online presence and provide an improved shopping experience for its customers.
High Costs Ail
While the Deckers brands' first-quarter results for fiscal 2024 showcase impressive growth, investors should remain attentive due to competitive pressures, economic shifts, and potential risks like high SG&A expenses and adverse currency effects. In the first quarter, SG&A expenses rose 15.6% year over year to $275.7 million due to strategic investments in marketing, supply chain, e-commerce and talent.
Wrapping Up
Deckers' commitment to disciplined brand marketplace management and a flexible operating model reinforces its confidence in achieving the increased full-year outlook. This strategic approach positions the company well to drive long-term success for its diverse portfolio of brands.
DECK envisions net sales of $3.980 billion for fiscal 2024, up from the earlier stated $3.950 billion. This suggests an increase of 10% from the $3.627 billion reported in fiscal 2023. The company expects fiscal 2024 earnings of $21.75-$22.25 per share, up from the $21.10-$21.60 per share stated earlier.
The Zacks Rank #3 (Hold) stock has rallied 50.1% in the past year compared with the industry’s growth of 8.1%. DECK has also outpaced the retail-wholesale sector’s rise of 5% in the same period.
3 Promising Stocks
A few better-ranked stocks in the same space are Urban Outfitters, Inc. (URBN - Free Report) , Abercrombie & Fitch Co. (ANF - Free Report) and American Eagle Outfitters Inc. (AEO - Free Report) .
The Zacks Consensus Estimate for Urban Outfitters’ current fiscal-year earnings and sales indicates growth of 83.4% and 6.6% from the year-ago period’s reported figures. URBN has a trailing four-quarter average earnings surprise of 19.2%.
Abercrombie & Fitch is a specialty retailer of premium, high-quality casual apparel. The company currently flaunts a Zacks Rank #1. ANF delivered a significant earnings surprise in the last reported quarter.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year sales implies growth of 10% from the previous year’s reported number. ANF has a trailing four-quarter average earnings surprise of 724.8%.
American Eagle Outfitters is a specialty retailer of casual apparel, accessories and footwear. It sports a Zacks Rank #1 at present.
The Zacks Consensus Estimate for American Eagle Outfitters’ current fiscal-year earnings and sales indicates growth of 33% and 2.2% from the year-ago period’s reported figures. AEO has a trailing four-quarter average earnings surprise of 43.2%.
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Deckers (DECK) Thrives on Its HOKA Brand and DTC Growth
Deckers Outdoor Corporation’s (DECK - Free Report) strategic vision demonstrates a commitment to not only growing its existing brands but also diversifying and innovating to remain competitive in the dynamic world of footwear, apparel and accessories.
The company is committed to building HOKA into a major player in the performance athletic market to reach multi-billion-dollar revenue levels. This ambition likely involves continued product innovation, expanding market share and leveraging HOKA's strong brand identity. The HOKA brand exhibited exceptional growth, with net sales increasing 27.4% to $420.5 million in the first quarter of fiscal 2024.
The HOKA brand is expected to rise more than 20% in fiscal 2024, with most of the increase likely to come from the brand's DTC business. UGG’s revenues are anticipated to rise in the low-single digits, backed by international expansion and gains from DTC.
Image Source: Zacks Investment Research
The company emphasizes profitable and underpenetrated markets through product innovation, and store expansion. Its primary focus now is perfecting the in-store consumer experience, ensuring that it aligns seamlessly with its brand ethos and meets evolving customer expectations.
The company is also focusing on enhancing its direct-to-consumer (DTC) business model. DTC net sales rose 35.3% to $250.4 million, while comparable DTC net sales jumped 33.4% in the first quarter of fiscal 2024.
Deckers is evidently adapting to evolving market trends by actively developing its e-commerce platform to capture additional sales opportunities. The company has been making significant investments to strengthen its online presence and provide an improved shopping experience for its customers.
High Costs Ail
While the Deckers brands' first-quarter results for fiscal 2024 showcase impressive growth, investors should remain attentive due to competitive pressures, economic shifts, and potential risks like high SG&A expenses and adverse currency effects. In the first quarter, SG&A expenses rose 15.6% year over year to $275.7 million due to strategic investments in marketing, supply chain, e-commerce and talent.
Wrapping Up
Deckers' commitment to disciplined brand marketplace management and a flexible operating model reinforces its confidence in achieving the increased full-year outlook. This strategic approach positions the company well to drive long-term success for its diverse portfolio of brands.
DECK envisions net sales of $3.980 billion for fiscal 2024, up from the earlier stated $3.950 billion. This suggests an increase of 10% from the $3.627 billion reported in fiscal 2023. The company expects fiscal 2024 earnings of $21.75-$22.25 per share, up from the $21.10-$21.60 per share stated earlier.
The Zacks Rank #3 (Hold) stock has rallied 50.1% in the past year compared with the industry’s growth of 8.1%. DECK has also outpaced the retail-wholesale sector’s rise of 5% in the same period.
3 Promising Stocks
A few better-ranked stocks in the same space are Urban Outfitters, Inc. (URBN - Free Report) , Abercrombie & Fitch Co. (ANF - Free Report) and American Eagle Outfitters Inc. (AEO - Free Report) .
Urban Outfitters, which specializes in the retail and wholesale of general consumer products, sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Urban Outfitters’ current fiscal-year earnings and sales indicates growth of 83.4% and 6.6% from the year-ago period’s reported figures. URBN has a trailing four-quarter average earnings surprise of 19.2%.
Abercrombie & Fitch is a specialty retailer of premium, high-quality casual apparel. The company currently flaunts a Zacks Rank #1. ANF delivered a significant earnings surprise in the last reported quarter.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year sales implies growth of 10% from the previous year’s reported number. ANF has a trailing four-quarter average earnings surprise of 724.8%.
American Eagle Outfitters is a specialty retailer of casual apparel, accessories and footwear. It sports a Zacks Rank #1 at present.
The Zacks Consensus Estimate for American Eagle Outfitters’ current fiscal-year earnings and sales indicates growth of 33% and 2.2% from the year-ago period’s reported figures. AEO has a trailing four-quarter average earnings surprise of 43.2%.