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Deckers' (DECK) Omni-Channel Efforts & HOKA Label Aid Growth
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Deckers Outdoor Corporation (DECK - Free Report) has been benefiting from omni-channel expansion endeavors, HOKA ONE ONE brand, and impressive customer-centric product and marketing strategies. The company’s focus on expanding brand assortments, introducing an innovative line of products and enhancing direct-to-consumer (DTC) business contribution are acting as tailwinds. Resonating well with the changing consumer trends, the company is constantly developing its e-commerce portal to capture incremental sales.
Incidentally, the Goleta, CA-based company’s shares have rallied 27.3% in the past three months versus the industry’s growth of 12.2%. Impressively, the key designer and marketer of footwear and apparel comfortably outperformed the Zacks Consumer Discretionary sector’s growth of 16.9% and the S&P 500 index’s rise of 9.9% in the same time frame.
This outperformance is also attributed to the company’s recently reported stellar third-quarter fiscal 2021 results. Both the top and the bottom line outpaced the Zacks Consensus Estimate and compared favorably with the year-ago quarter figures.
Robust Strategies
Deckers’ focus on bolstering e-commerce competencies and investments in digital marketing helped it to better engage with customers amid tough times. During the third quarter of fiscal 2021, the company’s DTC net sales jumped 25.7% to $519.9 million, while DTC comparable sales were up 33.8% year over year. Notably, consumer acquisition online has been robust and increased 87% year to date through the fiscal third quarter across the company’s brand portfolio.
Now talking of Deckers’ brand strength, the company is making marketing investments to build brand awareness, especially for HOKA ONE ONE. Apparently, the brand witnessed an increase of 117% in consumer acquisition online year to date through the fiscal third quarter, while consumer retention doubled on a year-over-year basis. Per the NPD Group's retail tracking service, the brand’s sales in the U.S.-run specialty channel grew 19% year over year during the three months ended December 2020.
Notably, HOKA ONE ONE is fueling the company’s direct-to-consumer business across the globe. Management said that its HOKA ONE ONE brand is likely to reach $500 million by this fiscal-end. Over the long term, the brand is expected to cross the $1-billion mark, with footwear driving majority of the business. We note that the company is benefiting from higher revenue volume from the UGG and HOKA ONE ONE brands and increased proportion of full-priced UGG revenues.
Conclusion
Despite the aforesaid tailwinds, coronavirus uncertainties remain. Deckers anticipates temporary retail store closures across certain geographies, for at least some point in the fiscal fourth quarter, owing to the volatile pandemic-induced conditions. However, management has been evolving the company’s operations to stay afloat amid the pandemic. Although a volatile economic landscape with respect to COVID-19 persists, contributions from the DTC business and HOKA ONE ONE brand will continue to boost performance of this Zacks Rank #2 (Buy) company. In fact, strength in the company’s brands, a strong balance sheet and a stable operating model poise Deckers well for success.
Additionally, analysts look optimistic about Deckers. The Zacks Consensus Estimate for earnings stands at $12.60 for fiscal 2021 and $13.85 for fiscal 2022, suggesting respective growth of more than 30% and 9% year over year. An expected long-term earnings growth rate of 21.5%, ahead of that of the industry’s 13%, is also encouraging.
PVH Corp (PVH - Free Report) has a long-term earnings growth rate of 18% and a Zacks Rank #2.
Steven Madden (SHOO - Free Report) has a long-term earnings growth rate of 15% and a Zacks Rank #2.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Deckers' (DECK) Omni-Channel Efforts & HOKA Label Aid Growth
Deckers Outdoor Corporation (DECK - Free Report) has been benefiting from omni-channel expansion endeavors, HOKA ONE ONE brand, and impressive customer-centric product and marketing strategies. The company’s focus on expanding brand assortments, introducing an innovative line of products and enhancing direct-to-consumer (DTC) business contribution are acting as tailwinds. Resonating well with the changing consumer trends, the company is constantly developing its e-commerce portal to capture incremental sales.
Incidentally, the Goleta, CA-based company’s shares have rallied 27.3% in the past three months versus the industry’s growth of 12.2%. Impressively, the key designer and marketer of footwear and apparel comfortably outperformed the Zacks Consumer Discretionary sector’s growth of 16.9% and the S&P 500 index’s rise of 9.9% in the same time frame.
This outperformance is also attributed to the company’s recently reported stellar third-quarter fiscal 2021 results. Both the top and the bottom line outpaced the Zacks Consensus Estimate and compared favorably with the year-ago quarter figures.
Robust Strategies
Deckers’ focus on bolstering e-commerce competencies and investments in digital marketing helped it to better engage with customers amid tough times. During the third quarter of fiscal 2021, the company’s DTC net sales jumped 25.7% to $519.9 million, while DTC comparable sales were up 33.8% year over year. Notably, consumer acquisition online has been robust and increased 87% year to date through the fiscal third quarter across the company’s brand portfolio.
Now talking of Deckers’ brand strength, the company is making marketing investments to build brand awareness, especially for HOKA ONE ONE. Apparently, the brand witnessed an increase of 117% in consumer acquisition online year to date through the fiscal third quarter, while consumer retention doubled on a year-over-year basis. Per the NPD Group's retail tracking service, the brand’s sales in the U.S.-run specialty channel grew 19% year over year during the three months ended December 2020.
Notably, HOKA ONE ONE is fueling the company’s direct-to-consumer business across the globe. Management said that its HOKA ONE ONE brand is likely to reach $500 million by this fiscal-end. Over the long term, the brand is expected to cross the $1-billion mark, with footwear driving majority of the business. We note that the company is benefiting from higher revenue volume from the UGG and HOKA ONE ONE brands and increased proportion of full-priced UGG revenues.
Conclusion
Despite the aforesaid tailwinds, coronavirus uncertainties remain. Deckers anticipates temporary retail store closures across certain geographies, for at least some point in the fiscal fourth quarter, owing to the volatile pandemic-induced conditions. However, management has been evolving the company’s operations to stay afloat amid the pandemic. Although a volatile economic landscape with respect to COVID-19 persists, contributions from the DTC business and HOKA ONE ONE brand will continue to boost performance of this Zacks Rank #2 (Buy) company. In fact, strength in the company’s brands, a strong balance sheet and a stable operating model poise Deckers well for success.
Additionally, analysts look optimistic about Deckers. The Zacks Consensus Estimate for earnings stands at $12.60 for fiscal 2021 and $13.85 for fiscal 2022, suggesting respective growth of more than 30% and 9% year over year. An expected long-term earnings growth rate of 21.5%, ahead of that of the industry’s 13%, is also encouraging.
Don’t Miss These Solid Bets Too
Crocs (CROX - Free Report) has a long-term earnings growth rate of 15% and currently 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) has a long-term earnings growth rate of 18% and a Zacks Rank #2.
Steven Madden (SHOO - Free Report) has a long-term earnings growth rate of 15% and a Zacks Rank #2.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
AccessZacks Top 10 Stocks for 2021 today >>