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.
Deckers Stock Rallies 89% in a Year: Lock in Gains or Stay Invested?
Read MoreHide Full Article
Deckers Outdoor Corporation (DECK - Free Report) stock has been trending up the charts, recording growth of 89% in the past year. This upside outpaces the broader Retail-Wholesale sector’s return of 37.3% and the Zacks Retail - Apparel and Shoes industry‘s 31.2% growth in the same period. DECK’s shares also surpassed the S&P 500 index’s appreciation of 37% at the same time.
Image Source: Zacks Investment Research
The company’s strategic initiatives, such as expanding its brand presence, strengthening its direct-to-consumer (DTC) channels and driving product innovation, have been key growth factors for this upside. Additionally, its international market expansion has contributed to this momentum, reflecting strong execution across different regions and segments.
DECK’s stock is currently priced at $160.31, which is 13.1% below its 52-week high of $184.48. The stock is currently trading above its 200-day and 50-day moving averages of $155.73 and $149.16, respectively, highlighting a sustained upward trend.
With the stock trading at elevated levels, many investors wonder: should they lock in gains, hold or stay bullish on Deckers?
Deckers Capitalizes on Brand Strength & Strategic Expansion
Deckers has made notable progress through its strategic focus on profitable markets and ongoing initiatives in product innovation, store expansion and enhancing e-commerce capabilities. By expanding new styles and collections, introducing innovative products and optimizing distribution channels, Deckers is well-positioned for sustained growth.
Deckers' HOKA brand saw strong performance in the first quarter of fiscal 2025, driven by popular styles like Clifton and Bondi, as well as emerging franchises such as Mach and Kawana. Innovative designs like the Cielo X1 and Skyward X also exceeded expectations, boosting the brand's global appeal.
The UGG brand also registered significant growth, fueled by strong full-price sales and the success of its expanded Golden Collection. The brand saw momentum in its direct-to-consumer channels and robust U.S. wholesale demand, with consumer-informed products sustaining demand.
Deckers' DTC business and a proactive omnichannel expansion strategy bode well. The company's focus on aligning product creation, marketing and omnichannel distribution with consumer needs has enhanced its ability to deliver a seamless shopping experience. This strategy not only boosts customer engagement but also drives higher margins. By leveraging data analytics, Deckers can personalize offerings, optimize inventory management and better forecast demand, positioning itself for sustainable growth in a competitive environment.
Deckers' wholesale business also remains a key growth driver supported by strong brand portfolio performance and retailer partnerships in the United States and Europe. Its international expansion, including new store openings and increased online sales in regions like China and EMEA, has further fueled growth for both UGG and HOKA, highlighting the success of strategic investments in diverse markets.
Upward Earnings Estimate Revisions Signal Confidence in DECK
Reflecting optimism around DECK, analysts have revised their EPS estimates upward. Over the past 30 days, analysts have increased their current and next fiscal year estimates by 1.1% to $5.30 and 0.3% to $5.85 per share, respectively. These estimates indicate expected year-over-year growth rates of around 9.1% and 10.4%, respectively.
Despite its strong overall performance, Deckers has been facing ongoing challenges with its Teva and Sanuk brands due to a subdued demand environment. This resulted in a 4.3% decline in Teva sales in the first quarter of fiscal 2025 and Sanuk experienced a significant sales drop of 28.4% during the same period. The company finalized an agreement to sell off the Sanuk brand, with the transaction anticipated to be completed by August 2024.
Looking ahead, the company expects potential margin pressures. This anticipated margin compression stems from rising costs from increased freight expenses and a shift toward a more normalized promotional environment. This move toward more promotions and discounts could further squeeze margins, challenging the company's ability to maintain its profitability at the levels seen in the past year.
Deckers Stock’s Premium Valuation
From a valuation standpoint, Deckers currently trades at a premium relative to its industry peers. The company’s forward 12-month price-to-earnings ratio is 28.88, higher than the industry average of 16.64x. This elevated valuation suggests that investors might be paying a premium relative to the company's anticipated earnings growth.
Image Source: Zacks Investment Research
Investment Guidance on DECK Stock
Deckers has performed well on bourses, driven by the success of key brands like HOKA and UGG, along with the company’s focus on expanding direct-to-consumer channels, international markets and product innovation. However, challenges remain, including weaker performance in the Teva brands and potential margin pressures. Additionally, DECK's premium valuation suggests that investors are paying a premium, potentially signaling caution for those considering entry at current levels. However, investors with a long-term horizon may stay invested in this Zacks Rank #3 (Hold) stock.
Three Picks You Can’t Miss
We have highlighted three better-ranked stocks in the broader sector, namely Abercrombie & Fitch Co. (ANF - Free Report) , Steven Madden, Ltd. (SHOO - Free Report) and Crocs, Inc. (CROX - Free Report) .
The Zacks Consensus Estimate for ANF’s current financial-year sales and earnings indicates growth of 13% and 63.4%, respectively, from the year-ago reported figures. Abercrombie has a trailing four-quarter earnings surprise of 27.9%, on average.
Steven Madden designs, sources, markets and sells fashion-forward name-brand and private-label footwear. It currently has a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Steven Madden’s 2024 earnings and sales indicates growth of 6.9% and 12.7%, respectively, from the 2023 reported levels. SHOO has a trailing four-quarter average earnings surprise of 9.5%.
Crocs offers a wide variety of footwear products, including sandals, wedges, flips and slides that cater to people of all ages. The company currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Crocs’ 2024 earnings and sales indicates growth of 7.1% and 4.2%, respectively, from the 2023 actuals. CROX has a trailing four-quarter average earnings surprise of 14.9%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Deckers Stock Rallies 89% in a Year: Lock in Gains or Stay Invested?
Deckers Outdoor Corporation (DECK - Free Report) stock has been trending up the charts, recording growth of 89% in the past year. This upside outpaces the broader Retail-Wholesale sector’s return of 37.3% and the Zacks Retail - Apparel and Shoes industry‘s 31.2% growth in the same period. DECK’s shares also surpassed the S&P 500 index’s appreciation of 37% at the same time.
Image Source: Zacks Investment Research
The company’s strategic initiatives, such as expanding its brand presence, strengthening its direct-to-consumer (DTC) channels and driving product innovation, have been key growth factors for this upside. Additionally, its international market expansion has contributed to this momentum, reflecting strong execution across different regions and segments.
DECK’s stock is currently priced at $160.31, which is 13.1% below its 52-week high of $184.48. The stock is currently trading above its 200-day and 50-day moving averages of $155.73 and $149.16, respectively, highlighting a sustained upward trend.
With the stock trading at elevated levels, many investors wonder: should they lock in gains, hold or stay bullish on Deckers?
Deckers Capitalizes on Brand Strength & Strategic Expansion
Deckers has made notable progress through its strategic focus on profitable markets and ongoing initiatives in product innovation, store expansion and enhancing e-commerce capabilities. By expanding new styles and collections, introducing innovative products and optimizing distribution channels, Deckers is well-positioned for sustained growth.
Deckers' HOKA brand saw strong performance in the first quarter of fiscal 2025, driven by popular styles like Clifton and Bondi, as well as emerging franchises such as Mach and Kawana. Innovative designs like the Cielo X1 and Skyward X also exceeded expectations, boosting the brand's global appeal.
The UGG brand also registered significant growth, fueled by strong full-price sales and the success of its expanded Golden Collection. The brand saw momentum in its direct-to-consumer channels and robust U.S. wholesale demand, with consumer-informed products sustaining demand.
Deckers' DTC business and a proactive omnichannel expansion strategy bode well. The company's focus on aligning product creation, marketing and omnichannel distribution with consumer needs has enhanced its ability to deliver a seamless shopping experience. This strategy not only boosts customer engagement but also drives higher margins. By leveraging data analytics, Deckers can personalize offerings, optimize inventory management and better forecast demand, positioning itself for sustainable growth in a competitive environment.
Deckers' wholesale business also remains a key growth driver supported by strong brand portfolio performance and retailer partnerships in the United States and Europe. Its international expansion, including new store openings and increased online sales in regions like China and EMEA, has further fueled growth for both UGG and HOKA, highlighting the success of strategic investments in diverse markets.
Upward Earnings Estimate Revisions Signal Confidence in DECK
Reflecting optimism around DECK, analysts have revised their EPS estimates upward. Over the past 30 days, analysts have increased their current and next fiscal year estimates by 1.1% to $5.30 and 0.3% to $5.85 per share, respectively. These estimates indicate expected year-over-year growth rates of around 9.1% and 10.4%, respectively.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Image Source: Zacks Investment Research
Challenges in Deckers’ Way
Despite its strong overall performance, Deckers has been facing ongoing challenges with its Teva and Sanuk brands due to a subdued demand environment. This resulted in a 4.3% decline in Teva sales in the first quarter of fiscal 2025 and Sanuk experienced a significant sales drop of 28.4% during the same period. The company finalized an agreement to sell off the Sanuk brand, with the transaction anticipated to be completed by August 2024.
Looking ahead, the company expects potential margin pressures. This anticipated margin compression stems from rising costs from increased freight expenses and a shift toward a more normalized promotional environment. This move toward more promotions and discounts could further squeeze margins, challenging the company's ability to maintain its profitability at the levels seen in the past year.
Deckers Stock’s Premium Valuation
From a valuation standpoint, Deckers currently trades at a premium relative to its industry peers. The company’s forward 12-month price-to-earnings ratio is 28.88, higher than the industry average of 16.64x. This elevated valuation suggests that investors might be paying a premium relative to the company's anticipated earnings growth.
Image Source: Zacks Investment Research
Investment Guidance on DECK Stock
Deckers has performed well on bourses, driven by the success of key brands like HOKA and UGG, along with the company’s focus on expanding direct-to-consumer channels, international markets and product innovation. However, challenges remain, including weaker performance in the Teva brands and potential margin pressures. Additionally, DECK's premium valuation suggests that investors are paying a premium, potentially signaling caution for those considering entry at current levels. However, investors with a long-term horizon may stay invested in this Zacks Rank #3 (Hold) stock.
Three Picks You Can’t Miss
We have highlighted three better-ranked stocks in the broader sector, namely Abercrombie & Fitch Co. (ANF - Free Report) , Steven Madden, Ltd. (SHOO - Free Report) and Crocs, Inc. (CROX - Free Report) .
Abercrombie, a leading casual apparel retailer, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ANF’s current financial-year sales and earnings indicates growth of 13% and 63.4%, respectively, from the year-ago reported figures. Abercrombie has a trailing four-quarter earnings surprise of 27.9%, on average.
Steven Madden designs, sources, markets and sells fashion-forward name-brand and private-label footwear. It currently has a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Steven Madden’s 2024 earnings and sales indicates growth of 6.9% and 12.7%, respectively, from the 2023 reported levels. SHOO has a trailing four-quarter average earnings surprise of 9.5%.
Crocs offers a wide variety of footwear products, including sandals, wedges, flips and slides that cater to people of all ages. The company currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Crocs’ 2024 earnings and sales indicates growth of 7.1% and 4.2%, respectively, from the 2023 actuals. CROX has a trailing four-quarter average earnings surprise of 14.9%.