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Deckers (DECK) Gains From DTC Business, Omni-Channel Expansion
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Deckers Outdoor Corporation (DECK - Free Report) has exhibited impressive growth in its Direct-to-Consumer (DTC) sector, alongside a bold strategy for broadening its market reach through various channels. In the third quarter of fiscal 2024, the company saw a significant rise of 22.7% year over year in DTC revenues, which constituted a remarkable 55% of the top line. This notable increase underscores Deckers' success in engaging customers across a range of platforms.
Furthermore, the company's commitment to customizing its product development, marketing efforts and omni-channel distribution to align with consumer preferences has yielded substantial results, improved immediate operational performance and advanced the brand's long-term strategic objectives.
Through efforts to open new stores and enter new markets, DECK is focused on making its brand more accessible and enhancing the consumer experience across different touchpoints. By continuing to bolster its DTC capabilities and expand its omni-channel presence, the company is well-positioned for further growth and increased engagement in the marketplace.
Image Source: Zacks Investment Research
Wholesale Business Bodes Well
Deckers' wholesale operations have markedly fueled its revenue growth and broader expansion efforts. Amid the hurdles presented by shifting market conditions, the wholesale division has demonstrated notable steadfastness, particularly in vital regions such as the United States and Europe. In the fiscal third quarter, it recorded an 8.6% increase in wholesale revenues compared with the previous year, evidencing this channel's capacity to drive additional sales.
This accomplishment underscores continuous appeal of Deckers' array of brands and its adeptness at fostering strong bonds with retail allies. Moreover, the wholesale channel plays a critical role in amplifying the company's market footprint and elevating its brand visibility on a global scale.
Zacks Rank & Estimate
Deckers 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 key strategic initiatives, including product innovation and brand assortment expansion, coupled with a robust focus on DTC channels. In the said period, shares of this Zacks Rank #1 (Strong Buy) company have surged 119% compared with the industry’s growth of 37.6%.
The Zacks Consensus Estimate for the current and next fiscal years’ earnings per share is pegged at $26.86 and $29.78, indicating 38.7% and 10.9% growth from the year-ago levels, respectively. The Zacks Consensus Estimate for the current and next fiscal years’ sales is pegged at $4.2 billion and $4.64 billion, suggesting 15.7% and 10.7% increase from the prior-year figures, respectively.
Strong Outlook
Deckers' dedication to disciplined management of brand marketplaces and an adaptable operating model strengthens its belief in meeting full-year expectations.
DECK expects net sales of $4,150 million for fiscal 2024, up from the earlier prediction $4,025 million. This suggests an increase of 14% from $3,627 million reported in fiscal 2023. Management projects fiscal 2024 earnings in the range of $26.25-$26.50 per share, up from the formerly stated band of $22.90-$23.25. Notably, Deckers reported earnings of $19.37 in fiscal 2023.
The company is also expecting an improvement in its profitability in fiscal 2024. The gross margin is anticipated to be 54.5%, up from the previously anticipated range of 52.5-53%, indicating an expansion of 420 basis points from the year-earlier actuals. The operating margin is forecast to be 20%, suggesting a rise from the previous year’s reported figure of 18%.
Deckers is thriving, propelled by substantial growth in its direct-to-consumer channel, especially with UGG and HOKA brands, which have been bolstered by effective e-commerce and omni-channel strategies. Alongside a robust wholesale performance and an optimistic financial forecast featuring an increase in net sales and earnings, the company is well-positioned for continued success.
Other Promising Stocks
Some other top-ranked stocks in the same space are American Eagle Outfitters Inc. (AEO - Free Report) , Abercrombie & Fitch Co. (ANF - Free Report) and Crocs, Inc. (CROX - Free Report) .
The Zacks Consensus Estimate for American Eagle Outfitters’ current fiscal-year earnings and sales indicates growth of 11.2% and 3.3%, respectively, from the year-ago period’s reported figures. AEO has a trailing four-quarter average earnings surprise of 22.7%.
Abercrombie & Fitch is a specialty retailer of premium, high-quality casual apparel. The company currently carries a Zacks Rank #2 (Buy). ANF has a trailing four-quarter average earnings surprise of 715.6%.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year earnings and sales indicates growth of 16.4% and 5.7%, respectively, from the year-ago period’s reported figures.
Crocs is one of the leading footwear brands, with its focus on comfort and style. CROX carries a Zacks Rank #2 at present.
The Zacks Consensus Estimate for Crocs’ current financial-year sales and EPS suggests growth of 3.9% and 2.9%, respectively, from the year-ago reported figures. CROX has a trailing four-quarter earnings surprise of 14.2%, on average.
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Deckers (DECK) Gains From DTC Business, Omni-Channel Expansion
Deckers Outdoor Corporation (DECK - Free Report) has exhibited impressive growth in its Direct-to-Consumer (DTC) sector, alongside a bold strategy for broadening its market reach through various channels. In the third quarter of fiscal 2024, the company saw a significant rise of 22.7% year over year in DTC revenues, which constituted a remarkable 55% of the top line. This notable increase underscores Deckers' success in engaging customers across a range of platforms.
Furthermore, the company's commitment to customizing its product development, marketing efforts and omni-channel distribution to align with consumer preferences has yielded substantial results, improved immediate operational performance and advanced the brand's long-term strategic objectives.
Through efforts to open new stores and enter new markets, DECK is focused on making its brand more accessible and enhancing the consumer experience across different touchpoints. By continuing to bolster its DTC capabilities and expand its omni-channel presence, the company is well-positioned for further growth and increased engagement in the marketplace.
Image Source: Zacks Investment Research
Wholesale Business Bodes Well
Deckers' wholesale operations have markedly fueled its revenue growth and broader expansion efforts. Amid the hurdles presented by shifting market conditions, the wholesale division has demonstrated notable steadfastness, particularly in vital regions such as the United States and Europe. In the fiscal third quarter, it recorded an 8.6% increase in wholesale revenues compared with the previous year, evidencing this channel's capacity to drive additional sales.
This accomplishment underscores continuous appeal of Deckers' array of brands and its adeptness at fostering strong bonds with retail allies. Moreover, the wholesale channel plays a critical role in amplifying the company's market footprint and elevating its brand visibility on a global scale.
Zacks Rank & Estimate
Deckers 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 key strategic initiatives, including product innovation and brand assortment expansion, coupled with a robust focus on DTC channels. In the said period, shares of this Zacks Rank #1 (Strong Buy) company have surged 119% compared with the industry’s growth of 37.6%.
The Zacks Consensus Estimate for the current and next fiscal years’ earnings per share is pegged at $26.86 and $29.78, indicating 38.7% and 10.9% growth from the year-ago levels, respectively. The Zacks Consensus Estimate for the current and next fiscal years’ sales is pegged at $4.2 billion and $4.64 billion, suggesting 15.7% and 10.7% increase from the prior-year figures, respectively.
Strong Outlook
Deckers' dedication to disciplined management of brand marketplaces and an adaptable operating model strengthens its belief in meeting full-year expectations.
DECK expects net sales of $4,150 million for fiscal 2024, up from the earlier prediction $4,025 million. This suggests an increase of 14% from $3,627 million reported in fiscal 2023. Management projects fiscal 2024 earnings in the range of $26.25-$26.50 per share, up from the formerly stated band of $22.90-$23.25. Notably, Deckers reported earnings of $19.37 in fiscal 2023.
The company is also expecting an improvement in its profitability in fiscal 2024. The gross margin is anticipated to be 54.5%, up from the previously anticipated range of 52.5-53%, indicating an expansion of 420 basis points from the year-earlier actuals. The operating margin is forecast to be 20%, suggesting a rise from the previous year’s reported figure of 18%.
Deckers is thriving, propelled by substantial growth in its direct-to-consumer channel, especially with UGG and HOKA brands, which have been bolstered by effective e-commerce and omni-channel strategies. Alongside a robust wholesale performance and an optimistic financial forecast featuring an increase in net sales and earnings, the company is well-positioned for continued success.
Other Promising Stocks
Some other top-ranked stocks in the same space are American Eagle Outfitters Inc. (AEO - Free Report) , Abercrombie & Fitch Co. (ANF - Free Report) and Crocs, Inc. (CROX - Free Report) .
American Eagle Outfitters is a specialty retailer of casual apparel, accessories and footwear. It sports a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for American Eagle Outfitters’ current fiscal-year earnings and sales indicates growth of 11.2% and 3.3%, respectively, from the year-ago period’s reported figures. AEO has a trailing four-quarter average earnings surprise of 22.7%.
Abercrombie & Fitch is a specialty retailer of premium, high-quality casual apparel. The company currently carries a Zacks Rank #2 (Buy). ANF has a trailing four-quarter average earnings surprise of 715.6%.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year earnings and sales indicates growth of 16.4% and 5.7%, respectively, from the year-ago period’s reported figures.
Crocs is one of the leading footwear brands, with its focus on comfort and style. CROX carries a Zacks Rank #2 at present.
The Zacks Consensus Estimate for Crocs’ current financial-year sales and EPS suggests growth of 3.9% and 2.9%, respectively, from the year-ago reported figures. CROX has a trailing four-quarter earnings surprise of 14.2%, on average.