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Here's Why Deckers (DECK) Stock is Rallying Ahead of Industry

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Deckers Outdoor Corporation (DECK - Free Report) stock has been doing well on the bourses, thanks to its efforts related to product innovations, store expansion and enhancement of e-commerce capabilities. DECK’s focus on expanding its brand assortments, bringing a more innovative line of products and optimizing omnichannel distribution bode well.

Buoyed by the aforesaid tailwinds, this major footwear and accessories designer’s shares have appreciated 62.7%, comfortably outperforming the industry’s 10.7% growth in the past year.

Let’s Delve Deep

Resonating well with the changing trends, Deckers is constantly developing its e-commerce portal to capture the incremental sales. The company has made substantial investments to strengthen its online presence and improve the shopping experience for customers. The company is focused on opening smaller-concept omnichannel outlets and expanding programs such as Retail Inventory Online, Infinite UGG, Buy Online, Return in Store and Click and Collect to enhance customers’ shopping experience.

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Additionally, Deckers is focused on product and marketing strategies, which are more skewed toward customers. The company is targeting profitable and underpenetrated markets to boost overall sales. Greater acceptance of the UGG brand's diverse product line along with the progress in Europe and Asia Pacific bode well. The HOKA ONE ONE brand is also performing impressively, and continues to build its customer base through a combination of robust product innovation and a disciplined marketing approach.

The company is progressing toward building HOKA ONE ONE into a major multibillion-dollar player, elevating UGG as a global lifestyle brand with diverse product offerings and enhancing direct-to-consumer (DTC) business. The company continues exploring opportunities to strategically expand the HOKA ONE ONE brand’s retail store fleet.

During the first quarter of fiscal 2024, DTC net sales rose 35.3% to $250.4 million while comparable DTC net sales jumped 33.4%. HOKA continues to be a key driver of consolidated growth.

Wrapping Up

We believe that the company’s focus on ramping up inventory, optimizing channel mix to fulfill consumer demand, scaling production to support brands and implementing price increases should position it well for growth. A VGM Score of A further highlights the strength of this current Zacks Rank #3 (Hold) company.

 Analysts seem optimistic about the stock. The Zacks Consensus Estimate for Deckers’ fiscal 2024 sales and earnings per share (EPS) is currently pegged at $3.98 billion and $22.40, respectively. These estimates suggest growth of 11.5% and 15.6%, respectively, from the year-ago fiscal quarter’s corresponding figures. The consensus estimate for next fiscal year’s sales and EPS of $4.38 billion and $25.49, respectively, reflects a corresponding increase of 10% and 13.8% year over year.

Given all the aforesaid tailwinds, we believe Deckers will continue to perform well on the bourses.

Eye These Solid Picks

Some better-ranked companies are Royal Caribbean (RCL - Free Report) , lululemon athletica (LULU - Free Report) and Ralph Lauren (RL - Free Report) .

Royal Caribbean sports a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

RCL has a trailing four-quarter earnings surprise of 28.5%, on average. The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates increases of 55.2% and 182.8%, respectively, from the year-ago period’s reported levels.

lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank #2 (Buy), at present.

The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 35.6% and 20.5%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 6.8%, on average.

Ralph Lauren, a footwear and accessories dealer, has a Zacks Rank of 2 at present. RL has a trailing four-quarter earnings surprise of 17.3%, on average.

The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales and EPS suggests growth of 2.8% and 13.7%, respectively, from the year-ago corresponding figures.

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