We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Consumer Demand Melts Higher for These 3 Companies: DECK, SHOO, BIRK
Read MoreHide Full Article
We’ve seen somewhat mixed reads on the state of the consumer this year, with big-ticket discretionary items continuing to face a demand cooldown while other general merchandise categories, such as apparel, have primarily remained intact for a fair share of companies.
Specifically, several footwear-centric apparel companies have enjoyed strong gains over the past year, a list that includes Steve Madden (SHOO - Free Report) , Birkenstock (BIRK - Free Report) , and Deckers Outdoor (DECK - Free Report) . Below is a chart illustrating the performance of each over the last year, with the Zacks Consumer Discretionary sector blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at what’s been driving the positivity.
Birkenstock Posts Record Sales
Birkenstock has undergone significant changes in recent years, expanding its product catalog nicely. It recently enjoyed a notably strong period, posting record Q2 sales that grew more than 20% year-over-year.
As a result of the robust demand, BIRK upped its full-year revenue guidance to 20%, with investors also raising their expectations accordingly post-earnings. The stock currently sports a favorable Zacks Rank #2 (Buy).
As shown below, the sales revisions trend for its FY24 has been positive since the beginning of 2024, up a staggering 25% since. The company has overall been witnessing a demand snowball, reporting strong consumer demand across all its categories, channels, and segments throughout the above-mentioned period.
Image Source: Zacks Investment Research
It’s worth noting that the company’s earnings outlook also shot higher alongside sales expectations, with the $1.40 Zacks Consensus EPS estimate up nearly 6% over the last year and seeing a big boost starting back in May.
Image Source: Zacks Investment Research
Steve Madden Reports Robust Sales Growth
Steve Madden, a current Zacks Rank #2 (Buy), also recently delivered a favorable quarterly release, posting an 11% beat relative to the Zacks Consensus EPS estimate and reporting sales nearly 4% ahead of the consensus. EPS saw a 21% increase, whereas sales shot nearly 20% higher from the year-ago period.
The company’s top line has recovered nicely over recent periods, with SHOO posting double-digit percentage year-over-year sales growth rates in each of its last three quarters. The sales outlook for its current fiscal year has remained bullish over the last year, with the $2.2 billion expected up nearly 9% across the period.
Image Source: Zacks Investment Research
In addition, Steve Madden’s margins have been consistently stable over recent years, as shown in the trailing twelve-month chart below. Operational efficiencies have aided its profitability picture, with key strategic initiatives also providing tailwinds.
Image Source: Zacks Investment Research
The company maintained its current year outlook following the results, still expecting annual sales growth in a band of 11% - 13% relative to FY23. Shares could also interest income-focused investors, currently yielding 1.9% annually compared to the Zacks Consumer Discretionary average of 0.9%.
Image Source: Zacks Investment Research
Deckers Outdoor Brand Momentum Continues
Deckers Outdoor, a current Zacks Rank #2 (Buy), recently enjoyed a strong quarter, beating both earnings and revenue expectations handily. Big growth was delivered, with EPS growing a staggering 90% year-over-year alongside a 22% increase in sales.
Continued brand momentum among UGG and Hoka shoes aided the favorable quarter, leading the company to up its current fiscal year outlook. Analysts have updated their outlook for the company’s current fiscal year accordingly following the print, with the $31.58 Zacks Consensus EPS estimate suggesting 8% growth year-over-year.
Image Source: Zacks Investment Research
The company has also been enjoying margin expansion, brightening its profitability picture nicely. It enjoyed the same throughout its latest release, with its gross margin expanding to 56.9% vs 51.3% in the year-ago period.
Please note that the chart below is on a trailing twelve-month basis.
Image Source: Zacks Investment Research
Bottom Line
While we’ve seen pockets of consumer weakness, it certainly hasn’t been broad-based, reflected by results we’ve gotten from several consumer-facing companies – Steve Madden (SHOO - Free Report) , Birkenstock (BIRK - Free Report) , and Deckers Outdoor (DECK - Free Report) .
Still, other big names, such as Nike, haven’t experienced the same positivity among consumers, raising some questions among investors. All in all, the Cons. Discretionary names that have been truly firing on all cylinders, enjoying robust consumer demand, have been aided by remarkable management teams.
On the flip side, those struggling have failed to meet consumers’ ever-changing needs and wants, reflected by slowing sales.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Consumer Demand Melts Higher for These 3 Companies: DECK, SHOO, BIRK
We’ve seen somewhat mixed reads on the state of the consumer this year, with big-ticket discretionary items continuing to face a demand cooldown while other general merchandise categories, such as apparel, have primarily remained intact for a fair share of companies.
Specifically, several footwear-centric apparel companies have enjoyed strong gains over the past year, a list that includes Steve Madden (SHOO - Free Report) , Birkenstock (BIRK - Free Report) , and Deckers Outdoor (DECK - Free Report) . Below is a chart illustrating the performance of each over the last year, with the Zacks Consumer Discretionary sector blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at what’s been driving the positivity.
Birkenstock Posts Record Sales
Birkenstock has undergone significant changes in recent years, expanding its product catalog nicely. It recently enjoyed a notably strong period, posting record Q2 sales that grew more than 20% year-over-year.
As a result of the robust demand, BIRK upped its full-year revenue guidance to 20%, with investors also raising their expectations accordingly post-earnings. The stock currently sports a favorable Zacks Rank #2 (Buy).
As shown below, the sales revisions trend for its FY24 has been positive since the beginning of 2024, up a staggering 25% since. The company has overall been witnessing a demand snowball, reporting strong consumer demand across all its categories, channels, and segments throughout the above-mentioned period.
Image Source: Zacks Investment Research
It’s worth noting that the company’s earnings outlook also shot higher alongside sales expectations, with the $1.40 Zacks Consensus EPS estimate up nearly 6% over the last year and seeing a big boost starting back in May.
Image Source: Zacks Investment Research
Steve Madden Reports Robust Sales Growth
Steve Madden, a current Zacks Rank #2 (Buy), also recently delivered a favorable quarterly release, posting an 11% beat relative to the Zacks Consensus EPS estimate and reporting sales nearly 4% ahead of the consensus. EPS saw a 21% increase, whereas sales shot nearly 20% higher from the year-ago period.
The company’s top line has recovered nicely over recent periods, with SHOO posting double-digit percentage year-over-year sales growth rates in each of its last three quarters. The sales outlook for its current fiscal year has remained bullish over the last year, with the $2.2 billion expected up nearly 9% across the period.
Image Source: Zacks Investment Research
In addition, Steve Madden’s margins have been consistently stable over recent years, as shown in the trailing twelve-month chart below. Operational efficiencies have aided its profitability picture, with key strategic initiatives also providing tailwinds.
Image Source: Zacks Investment Research
The company maintained its current year outlook following the results, still expecting annual sales growth in a band of 11% - 13% relative to FY23. Shares could also interest income-focused investors, currently yielding 1.9% annually compared to the Zacks Consumer Discretionary average of 0.9%.
Image Source: Zacks Investment Research
Deckers Outdoor Brand Momentum Continues
Deckers Outdoor, a current Zacks Rank #2 (Buy), recently enjoyed a strong quarter, beating both earnings and revenue expectations handily. Big growth was delivered, with EPS growing a staggering 90% year-over-year alongside a 22% increase in sales.
Continued brand momentum among UGG and Hoka shoes aided the favorable quarter, leading the company to up its current fiscal year outlook. Analysts have updated their outlook for the company’s current fiscal year accordingly following the print, with the $31.58 Zacks Consensus EPS estimate suggesting 8% growth year-over-year.
Image Source: Zacks Investment Research
The company has also been enjoying margin expansion, brightening its profitability picture nicely. It enjoyed the same throughout its latest release, with its gross margin expanding to 56.9% vs 51.3% in the year-ago period.
Please note that the chart below is on a trailing twelve-month basis.
Image Source: Zacks Investment Research
Bottom Line
While we’ve seen pockets of consumer weakness, it certainly hasn’t been broad-based, reflected by results we’ve gotten from several consumer-facing companies – Steve Madden (SHOO - Free Report) , Birkenstock (BIRK - Free Report) , and Deckers Outdoor (DECK - Free Report) .
Still, other big names, such as Nike, haven’t experienced the same positivity among consumers, raising some questions among investors. All in all, the Cons. Discretionary names that have been truly firing on all cylinders, enjoying robust consumer demand, have been aided by remarkable management teams.
On the flip side, those struggling have failed to meet consumers’ ever-changing needs and wants, reflected by slowing sales.