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Will Deckers Continue to Cruise Ahead of Industry in 2018?
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The Retail – Apparel and Shoes industry has portrayed a bull run in a year, evident from its increase of 23.8%, outperforming the S&P 500’s growth of 19.5%. Impressively, the industry ranks in the top 45% of the Zacks classified industries. Notably, Deckers Outdoor Corporation (DECK - Free Report) , one of the leading players in this industry, has crushed this marvelous trend too, with its rally of 44.4% over the past year.
Deckers has been riding on its robust omni-channel endeavors, solid restructuring plan, impressive second-quarter fiscal 2018 results and other growth strategies. In fact, a Momentum Score of A, with a long-term earnings growth rate of 10.7%, further boosts optimism in the stock.
Detailed Analysis of Catalysts
Keeping pace with the changing trends, Deckers has been constantly developing its e-commerce portal to capture incremental sales. The company has made substantial investments to strengthen its online presence and improve shopping experience for customers. Moreover, it is focused on opening smaller concept omni-channel outlets and expanding programs, alongside making new additions to its portfolio.
Additionally, Deckers’ focus on expanding its brand assortments, bringing more innovative line of products, targeting consumers digitally and optimizing omni-channel distribution bode well.
Moreover, in an effort to drive long-term growth, the company has undertaken strategic initiatives. Its store-fleet optimization plan focuses on striking the right balance between digital and physical stores. Also, 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.
Impressive Q2 & Upbeat FY18 Outlook
Deckers posted better-than-anticipated second-quarter fiscal 2018 results, defying retail challenges, and also stated that it is no longer pursuing its plan of sale. With this, the company witnessed third straight quarter of positive earnings surprise, delivering an impressive trailing four-quarter average of 88.3%.
In fact, the upbeat results led management to raise its fiscal 2018 guidance and now earnings are envisioned between $4.15 and $4.30 per share, up from $3.95-$4.15 projected earlier. However, the fiscal third-quarter net sales are expected to decline due to the timing of orders, with earnings per share also projected to come down on account of elevated operating expenses. Nevertheless, management remains encouraged of delivering growth on the back of its robust initiatives.
In addition, analysts are also bullish on this Zacks Rank #2 (Buy) stock as evident from the uptrend in the earnings estimates. The Zacks Consensus Estimate of $4.30 for fiscal 2018 and $4.96 for fiscal 2019 moved up 3 cents and 6 cents, respectively, over the past 30 days.
Shares of Skechers, Wolverine and Carter’s have surged 55.9%, 44% and 33.1%, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Will Deckers Continue to Cruise Ahead of Industry in 2018?
The Retail – Apparel and Shoes industry has portrayed a bull run in a year, evident from its increase of 23.8%, outperforming the S&P 500’s growth of 19.5%. Impressively, the industry ranks in the top 45% of the Zacks classified industries. Notably, Deckers Outdoor Corporation (DECK - Free Report) , one of the leading players in this industry, has crushed this marvelous trend too, with its rally of 44.4% over the past year.
Deckers has been riding on its robust omni-channel endeavors, solid restructuring plan, impressive second-quarter fiscal 2018 results and other growth strategies. In fact, a Momentum Score of A, with a long-term earnings growth rate of 10.7%, further boosts optimism in the stock.
Detailed Analysis of Catalysts
Keeping pace with the changing trends, Deckers has been constantly developing its e-commerce portal to capture incremental sales. The company has made substantial investments to strengthen its online presence and improve shopping experience for customers. Moreover, it is focused on opening smaller concept omni-channel outlets and expanding programs, alongside making new additions to its portfolio.
Additionally, Deckers’ focus on expanding its brand assortments, bringing more innovative line of products, targeting consumers digitally and optimizing omni-channel distribution bode well.
Moreover, in an effort to drive long-term growth, the company has undertaken strategic initiatives. Its store-fleet optimization plan focuses on striking the right balance between digital and physical stores. Also, 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.
Impressive Q2 & Upbeat FY18 Outlook
Deckers posted better-than-anticipated second-quarter fiscal 2018 results, defying retail challenges, and also stated that it is no longer pursuing its plan of sale. With this, the company witnessed third straight quarter of positive earnings surprise, delivering an impressive trailing four-quarter average of 88.3%.
In fact, the upbeat results led management to raise its fiscal 2018 guidance and now earnings are envisioned between $4.15 and $4.30 per share, up from $3.95-$4.15 projected earlier. However, the fiscal third-quarter net sales are expected to decline due to the timing of orders, with earnings per share also projected to come down on account of elevated operating expenses. Nevertheless, management remains encouraged of delivering growth on the back of its robust initiatives.
In addition, analysts are also bullish on this Zacks Rank #2 (Buy) stock as evident from the uptrend in the earnings estimates. The Zacks Consensus Estimate of $4.30 for fiscal 2018 and $4.96 for fiscal 2019 moved up 3 cents and 6 cents, respectively, over the past 30 days.
Not Done Yet? Looking For More, Check These
Other stocks in the same industry that carry the same Zacks Rank as Deckers are Skechers U.S.A., Inc. (SKX - Free Report) , Wolverine World Wide, Inc. (WWW - Free Report) and Carter's, Inc. (CRI - Free Report) . Also, these stocks have outpaced the industry in a year’s time. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Skechers, Wolverine and Carter’s have surged 55.9%, 44% and 33.1%, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>