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DECK Outperforms Its Industry in 3 Months: A Bullish Signal Ahead?

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Shares of Deckers Outdoor Corporation (DECK - Free Report) have gained 41.4% compared with the Zacks Retail-Apparel and Shoes industry’s 22.2% growth in the past three months. The company’s enhanced operational efficiency and growth initiatives have also helped it outperform the broader Retail-Wholesale sector and the S&P 500 index’s growth of 10.5% and 5%, respectively, during the same period.

DECK Stock Past Three-Month Performance

 

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DECK ended yesterday’s trading session at $214.92, above its 50 and 200-day simple moving averages of $198.50 and $165.63, respectively, highlighting a continued uptrend. This technical strength, along with sustained momentum, indicates positive market sentiment and investors’ confidence in Deckers’ financial health and growth prospects.

DECK Trades Above 50 & 200-Day Moving Averages

 

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Moreover, this leading designer and producer of innovative, niche footwear and accessories is currently trading just 1.6% below its 52-week high of $218.39 attained on Jan. 21, 2025, making investors contemplate their next moves.

Deckers Strengthens Its Position by Innovation, DTC Growth

DECK has bolstered its competitive edge in the footwear industry by prioritizing innovation and expanding its direct-to-consumer (DTC) operations. The company’s flagship brands, UGG and HOKA, are driving this progress. HOKA is poised to become a multi-billion-dollar brand, while UGG continues to affirm its status as a global lifestyle leader.

In the second quarter of fiscal 2025, HOKA achieved an impressive 34.7% year-over-year increase in sales, whereas UGG experienced 13% growth. This performance reflects Deckers’ diverse product offerings and optimized distribution strategies, which have helped sustain its strong market momentum. We anticipate year-over-year increases of 24% and 5.4% in net sales for the HOKA and UGG brands, respectively, in fiscal 2025.

Deckers’ thriving DTC business has also been a significant growth driver, with net sales increasing 19.9% year over year to $397.7 million and comparable sales rising 17%. By enhancing its digital capabilities and omnichannel presence, the company has ensured seamless customer experiences and broader brand reach. We foresee 12.6% growth in DTC revenues in fiscal 2025.

Wholesale Channels Drive DECK’s Revenue Growth

Deckers continues to benefit from a strong wholesale network, which plays a pivotal role in its revenue growth and market expansion. Wholesale revenues rose 20.2% year over year in the fiscal second quarter to $913.7 million.

This growth was fueled by strong performances from HOKA and UGG, with wholesale revenues rising 33% and 14%, respectively. Additionally, early inventory shipments by retail partners ahead of peak seasons contributed to the channel’s success, underscoring robust consumer demand.

Global Expansion Propels Deckers’ International Growth

International expansion remains a cornerstone of DECK’s growth strategy. In the fiscal second quarter, international sales grew 33% year over year, driven by strong demand for UGG and HOKA in the global markets. Investments in new stores and retail locations have further solidified Deckers’ global footprint.

By entering new markets and leveraging the popularity of its key brands, DECK is successfully tapping into diverse consumer bases. This international growth complements its domestic achievements, positioning the company for sustained success in fiscal 2025 and beyond. We expect revenues from international regions to increase 15.5% in fiscal 2025.

DECK’s Upbeat FY25 Outlook

Deckers’ growth strategy continues to deliver strong results, with a fiscal 2025 revenue projection of $4.8 billion, suggesting a 12% increase from the previous year. HOKA is expected to achieve 24% year-over-year growth, while UGG is forecast to see mid-single-digit growth.

The company has also revised its gross margin guidance to 55-55.5% from the prior mentioned 54%. Furthermore, earnings per share (EPS) guidance has been raised to $5.15-$5.25 from the earlier mentioned $4.96-$5.11, reflecting enhanced profitability from the $4.86 reported in the prior year.

Estimate Revisions Favor Deckers’ Stock

Analysts have responded positively to DECK’s prospects, which has been reflected in upward revisions in the Zacks Consensus Estimate for EPS. In the past seven days, analysts have increased their estimates for the current quarter by 1 cent. The consensus estimate for earnings is pegged at $2.50 per share.

The consensus estimate for earnings for the current fiscal year has been raised 1 cent to $5.56 per share. The Zacks Consensus Estimate for the current and the next fiscal years’ sales is pegged at $4.89 billion and $5.40 billion, indicating year-over-year growth of 14.1% and 10.4%, respectively.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

 

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Final Words on DECK

Investors may find Deckers appealing due to its strong market position, driven by innovation, robust direct-to-consumer growth and expanding global reach. The company’s flagship brands, UGG and HOKA, continue to deliver impressive performance, supported by a diverse product portfolio and optimized distribution strategies. Deckers has also demonstrated operational efficiency, with a solid wholesale network and enhanced digital capabilities fueling sustained momentum.

Positive technical indicators and upward earnings revisions further reflect market confidence in its growth potential, making DECK an attractive option for long-term investment. The company currently flaunts a Zacks Rank #1 (Strong Buy).

Other Key Picks

Some other top-ranked stocks are Abercrombie & Fitch Co. (ANF - Free Report) , The Gap, Inc. (GAP - Free Report) and Steven Madden, Ltd. (SHOO - Free Report) .

Abercrombie is a specialty retailer of premium, high-quality casual apparel. It currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for ANF’s fiscal 2025 earnings and sales indicates growth of 69.3% and 15.1%, respectively, from the fiscal 2024 reported levels. ANF delivered a trailing four-quarter average earnings surprise of 14.8%.

Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It presently has a Zacks Rank #2 (Buy). 

The Zacks Consensus Estimate for Gap’s fiscal 2025 earnings and sales implies growth of 41.3% and 0.8%, respectively, from the fiscal 2024 reported figures. GAP delivered a trailing four-quarter average earnings surprise of 101.2%.

Steven Madden designs, sources, markets, and sells fashion-forward name-brand and private-label footwear. It currently has a Zacks Rank of 2.

The Zacks Consensus Estimate for SHOO’s 2024 earnings and sales indicates growth of 8.6% and 13.6%, respectively, from the year-ago actuals. Steven Madden delivered a trailing four-quarter average earnings surprise of 9.8%.

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