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Deckers Efforts on Track, Stock Rallies 21% in Six Months
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Deckers Outdoor Corporation (DECK - Free Report) has not only outperformed the industry but also the broader sector in the past six months. The stock has increased 21.5%, while the industry has witnessed a decline of 3.7%. Meanwhile, the broader Consumer Discretionary sector gained 2.9%. So, what’s driving this Zacks Rank #2 (Buy) stock.
We believe that the company’s disciplined approach toward enhancing e-commerce capabilities, innovative line of products and concentrated efforts on expanding brand assortments has been well received by investors. Additionally, the stock’s long-term earnings growth rate of 9.8% and a VGM Score of A reflect its inherent strength.
Let’s Take a Closer Look
Deckers is targeting profitable markets and remains focused on product innovations and store augmentation along with transitioning to a direct subsidiary model from a distributor model outside the United States. The company’s focus on expanding brand assortments, bringing more innovative line of products, targeting consumers through marketing and optimizing omni-channel distribution also bode well.
In keeping with the changing trends, Deckers has made substantial investments to strengthen online presence and improve shopping experience for customers. Further, it is focused on opening smaller concept omni-channel outlets and expanding programs such as Retail Inventory Online, Infinite UGG; Buy Online, Return In Store; and Click and Collect to enhance shopping experience.
Moreover, in an effort to drive long-term growth, the company has taken strategic initiatives. Its store fleet optimization plan focuses on striking the right balance between digital and physical stores. Additionally, Deckers expects cost savings of about $150 million on the back of improvement in cost of goods sold and SG&A savings, which includes consolidation of retail outlets and process improvement efficiencies. This will help realize $100 million operating profit improvement by fiscal 2020.
However, management expects second-quarter fiscal 2018 net sales to decline approximately 10% on account of store closures and earlier-than-planned shipments in the first quarter. Management informed that the last year quarter sales also benefited from the shipment of Women's Classic II. Moreover, Deckers envisions earnings in the range of approximately $1.00-$1.05 compared with $1.23 per share delivered in the year-ago period.
Nevertheless, we believe that the company’s strategic endeavors will help overcome short-term impediments.
Looking for More? Check these 3 Trending Picks
G-III Apparel Group, Ltd. (GIII - Free Report) delivered an average positive earnings surprise of 3.5% in the trailing four quarters. It has a long-term earnings growth rate of 15% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PVH Corp. (PVH - Free Report) delivered an average positive earnings surprise of 3.6% in the trailing four quarters. The company has a long-term earnings growth rate of 13.1% and carries a Zacks Rank #2 (Buy).
The Children's Place, Inc. (PLCE - Free Report) delivered an average positive earnings surprise of 16.3% in the trailing four quarters. It has a long-term earnings growth rate of 9% and carries a Zacks Rank #2.
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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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Deckers Efforts on Track, Stock Rallies 21% in Six Months
Deckers Outdoor Corporation (DECK - Free Report) has not only outperformed the industry but also the broader sector in the past six months. The stock has increased 21.5%, while the industry has witnessed a decline of 3.7%. Meanwhile, the broader Consumer Discretionary sector gained 2.9%. So, what’s driving this Zacks Rank #2 (Buy) stock.
We believe that the company’s disciplined approach toward enhancing e-commerce capabilities, innovative line of products and concentrated efforts on expanding brand assortments has been well received by investors. Additionally, the stock’s long-term earnings growth rate of 9.8% and a VGM Score of A reflect its inherent strength.
Let’s Take a Closer Look
Deckers is targeting profitable markets and remains focused on product innovations and store augmentation along with transitioning to a direct subsidiary model from a distributor model outside the United States. The company’s focus on expanding brand assortments, bringing more innovative line of products, targeting consumers through marketing and optimizing omni-channel distribution also bode well.
In keeping with the changing trends, Deckers has made substantial investments to strengthen online presence and improve shopping experience for customers. Further, it is focused on opening smaller concept omni-channel outlets and expanding programs such as Retail Inventory Online, Infinite UGG; Buy Online, Return In Store; and Click and Collect to enhance shopping experience.
Moreover, in an effort to drive long-term growth, the company has taken strategic initiatives. Its store fleet optimization plan focuses on striking the right balance between digital and physical stores. Additionally, Deckers expects cost savings of about $150 million on the back of improvement in cost of goods sold and SG&A savings, which includes consolidation of retail outlets and process improvement efficiencies. This will help realize $100 million operating profit improvement by fiscal 2020.
However, management expects second-quarter fiscal 2018 net sales to decline approximately 10% on account of store closures and earlier-than-planned shipments in the first quarter. Management informed that the last year quarter sales also benefited from the shipment of Women's Classic II. Moreover, Deckers envisions earnings in the range of approximately $1.00-$1.05 compared with $1.23 per share delivered in the year-ago period.
Nevertheless, we believe that the company’s strategic endeavors will help overcome short-term impediments.
Looking for More? Check these 3 Trending Picks
G-III Apparel Group, Ltd. (GIII - Free Report) delivered an average positive earnings surprise of 3.5% in the trailing four quarters. It has a long-term earnings growth rate of 15% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PVH Corp. (PVH - Free Report) delivered an average positive earnings surprise of 3.6% in the trailing four quarters. The company has a long-term earnings growth rate of 13.1% and carries a Zacks Rank #2 (Buy).
The Children's Place, Inc. (PLCE - Free Report) delivered an average positive earnings surprise of 16.3% in the trailing four quarters. It has a long-term earnings growth rate of 9% and carries a Zacks Rank #2.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>