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Deckers (DECK) Marches Ahead of Its Industry: Here's Why
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Deckers Outdoor Corporation (DECK - Free Report) has exhibited a decent run on the bourses in the past year. The stock has outpaced the Zacks Retail-Apparel and Shoes industry, owing to its operational initiatives that include a focus on expanding its brand assortments, bringing a more innovative line of products, targeting consumers digitally and optimizing omni-channel distribution. In the said period, shares of this Zacks Rank #2 (Buy) company have surged 67.4% compared with the industry’s growth of 3.7%.
Additionally, an uptrend in the Zacks Consensus Estimate echoes the same sentiment. The consensus estimate for the current and next fiscal years has increased by 1 penny and 4 cents to $23.41 and $26.40, respectively, over the past seven days.
Image Source: Zacks Investment Research
Let’s Introspect
Deckers, which is one of the recognized names in the retail space, appears to be strategically positioning itself for success by focusing on profitable and underpenetrated markets, prioritizing product innovation, expanding its store presence and reinforcing its e-commerce capabilities. The company is leveraging digital channels to effectively reach and engage consumers, optimizing its omni-channel distribution for increased accessibility.
A customer-centric approach is evident in Deckers' emphasis on implementing customer relationship management software and loyalty programs. The company's direct engagement with wholesale customers has resulted in strong momentum in its global wholesale business, as evidenced by a notable 19.4% year-over-year increase in wholesale net sales in the second quarter of fiscal 2024, amounting to $760.2 million.
DECK's success is attributed to robust advancements in its direct-to-consumer (DTC) channels, brand expansion, a resilient balance sheet and a steadfast operating model. The DTC business has emerged as a pivotal growth driver, with the HOKA and UGG brands experiencing more than 30% growth in consumer acquisition in the fiscal second quarter.
Deckers reported an impressive 40% year-over-year increase in the DTC business, with net sales jumping 38.8% to $331.7 million and comparable net sales experiencing a substantial 36.8% increase during the same time frame.
The success of the UGG and HOKA brands is highlighted by their impressive year-over-year growth rates of 28.1% and 27.3% in the fiscal third quarter, respectively, contributing to overall consolidated revenue growth of 24.7%.
The HOKA brand is expected to see a further rise of more than 20% in fiscal 2024, with the majority of the increase likely to come from the brand's DTC business. UGG's revenues are anticipated to rise in the mid-single digits, supported by sustained global brand momentum and robust demand.
Promising Outlook
Deckers' dedication to disciplined management of brand marketplaces and an adaptable operating model strengthens its belief in meeting the heightened full-year expectations. This strategic methodology positions the company for sustained long-term success for its diverse array of brands.
DECK expects fiscal 2024 net sales to be $4,025 million, up from the earlier mentioned of $3,980 million. This suggests an increase of 11% from the $3,627 million reported in fiscal 2023. The company projects fiscal 2024 earnings of $22.90-$23.25 per share, up from the formerly stated $21.75-$22.25. Notably, Deckers reported earnings of $19.37 per share in fiscal 2023.
The company is also expecting an improvement in its profitability in fiscal 2024. The gross margin is expected to be 52.5-53%, up from the previously mentioned 52%, with an anticipated year-over-year expansion of 220-270 basis points. The operating margin is expected to be 18.5%, suggesting a rise from the previous year’s reported figure of 18%.
3 Other Promising Stocks
A few other top-ranked stocks in the same space are The Gap, Inc. (GPS - Free Report) , Skechers U.S.A., Inc. (SKX - Free Report) and Abercrombie & Fitch Co. (ANF - Free Report) .
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company currently sports a Zacks Rank #1 (Strong Buy). GPS delivered a significant earnings surprise in the last reported quarter.
The Zacks Consensus Estimate for The Gap’s current fiscal-year earnings implies growth of 347.5% from the previous year’s reported number. GPS has a trailing four-quarter average earnings surprise of 137.9%.
Skechers U.S.A. designs, develops, markets and distributes footwear for men, women and children. It currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Skechers’ current financial-year earnings and sales indicates growth of 44.5% and 8.2%, respectively, from the previous year’s reported figures. SKX has a trailing four-quarter average earnings surprise of 50.3%.
Abercrombie & Fitch is a specialty retailer of premium, high-quality casual apparel. The company currently carries a Zacks Rank #2. ANF delivered a 60.5% earnings surprise in the last reported quarter.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year sales implies growth of 10.4% from the previous year’s reported number. ANF has a trailing four-quarter average earnings surprise of 713%.
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Deckers (DECK) Marches Ahead of Its Industry: Here's Why
Deckers Outdoor Corporation (DECK - Free Report) has exhibited a decent run on the bourses in the past year. The stock has outpaced the Zacks Retail-Apparel and Shoes industry, owing to its operational initiatives that include a focus on expanding its brand assortments, bringing a more innovative line of products, targeting consumers digitally and optimizing omni-channel distribution. In the said period, shares of this Zacks Rank #2 (Buy) company have surged 67.4% compared with the industry’s growth of 3.7%.
Additionally, an uptrend in the Zacks Consensus Estimate echoes the same sentiment. The consensus estimate for the current and next fiscal years has increased by 1 penny and 4 cents to $23.41 and $26.40, respectively, over the past seven days.
Image Source: Zacks Investment Research
Let’s Introspect
Deckers, which is one of the recognized names in the retail space, appears to be strategically positioning itself for success by focusing on profitable and underpenetrated markets, prioritizing product innovation, expanding its store presence and reinforcing its e-commerce capabilities. The company is leveraging digital channels to effectively reach and engage consumers, optimizing its omni-channel distribution for increased accessibility.
A customer-centric approach is evident in Deckers' emphasis on implementing customer relationship management software and loyalty programs. The company's direct engagement with wholesale customers has resulted in strong momentum in its global wholesale business, as evidenced by a notable 19.4% year-over-year increase in wholesale net sales in the second quarter of fiscal 2024, amounting to $760.2 million.
DECK's success is attributed to robust advancements in its direct-to-consumer (DTC) channels, brand expansion, a resilient balance sheet and a steadfast operating model. The DTC business has emerged as a pivotal growth driver, with the HOKA and UGG brands experiencing more than 30% growth in consumer acquisition in the fiscal second quarter.
Deckers reported an impressive 40% year-over-year increase in the DTC business, with net sales jumping 38.8% to $331.7 million and comparable net sales experiencing a substantial 36.8% increase during the same time frame.
The success of the UGG and HOKA brands is highlighted by their impressive year-over-year growth rates of 28.1% and 27.3% in the fiscal third quarter, respectively, contributing to overall consolidated revenue growth of 24.7%.
The HOKA brand is expected to see a further rise of more than 20% in fiscal 2024, with the majority of the increase likely to come from the brand's DTC business. UGG's revenues are anticipated to rise in the mid-single digits, supported by sustained global brand momentum and robust demand.
Promising Outlook
Deckers' dedication to disciplined management of brand marketplaces and an adaptable operating model strengthens its belief in meeting the heightened full-year expectations. This strategic methodology positions the company for sustained long-term success for its diverse array of brands.
DECK expects fiscal 2024 net sales to be $4,025 million, up from the earlier mentioned of $3,980 million. This suggests an increase of 11% from the $3,627 million reported in fiscal 2023. The company projects fiscal 2024 earnings of $22.90-$23.25 per share, up from the formerly stated $21.75-$22.25. Notably, Deckers reported earnings of $19.37 per share in fiscal 2023.
The company is also expecting an improvement in its profitability in fiscal 2024. The gross margin is expected to be 52.5-53%, up from the previously mentioned 52%, with an anticipated year-over-year expansion of 220-270 basis points. The operating margin is expected to be 18.5%, suggesting a rise from the previous year’s reported figure of 18%.
3 Other Promising Stocks
A few other top-ranked stocks in the same space are The Gap, Inc. (GPS - Free Report) , Skechers U.S.A., Inc. (SKX - Free Report) and Abercrombie & Fitch Co. (ANF - Free Report) .
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. The company currently sports a Zacks Rank #1 (Strong Buy). GPS delivered a significant earnings surprise in the last reported quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Gap’s current fiscal-year earnings implies growth of 347.5% from the previous year’s reported number. GPS has a trailing four-quarter average earnings surprise of 137.9%.
Skechers U.S.A. designs, develops, markets and distributes footwear for men, women and children. It currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Skechers’ current financial-year earnings and sales indicates growth of 44.5% and 8.2%, respectively, from the previous year’s reported figures. SKX has a trailing four-quarter average earnings surprise of 50.3%.
Abercrombie & Fitch is a specialty retailer of premium, high-quality casual apparel. The company currently carries a Zacks Rank #2. ANF delivered a 60.5% earnings surprise in the last reported quarter.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year sales implies growth of 10.4% from the previous year’s reported number. ANF has a trailing four-quarter average earnings surprise of 713%.