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Here's Why You Should Add Deckers to Your Portfolio Right Now

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Deckers Outdoor Corporation (DECK - Free Report) is worth giving a shot as its sound fundamentals and growth efforts look impressive. Moreover, the company witnessed the 12th straight quarter of positive sales and earnings surprises in third-quarter fiscal 2020. To top it, management raised its fiscal 2020 view.

Notably, the Zacks Rank #1 (Strong Buy) stock has rallied 16.3% in the past three months, outperforming the industry’s growth of 8.6%. Also, analysts are growing bullish on the stock. Evidently, the Zacks Consensus Estimate for fiscal 2020 earnings has been revised 5.2% upward over the past 30 days. Further, a VGM Score of A and a long-term earnings growth rate of 12.4% increase its odds of success.

That said, let’s delve deeper into the factors making this company a promising bet.

 

 

Key Growth Catalysts

Deckers has been benefiting from the focus on expanding brand assortments, introducing more innovative line of products, targeting consumers digitally through marketing and sturdy e-commerce, and optimizing omni-channel distribution. Further, in keeping with the changing scenario, the company has been making substantial investments to strengthen online presence and open smaller concept omni-channel outlets. The company also has been making marketing investments to build brand awareness for HOKA ONE ONE, and UGG Men’s and UGG Women’s non-core category.

The company remains focused on product and marketing strategies that are more inclined toward customers. In this respect, it is implementing customer relationship management (CRM) software and concentrating on loyalty program. Moreover, the company is working toward the expansion of its product categories on consumers’ changing trends. In order to capture incremental sales and margins, it is selling directly to wholesale customers.

Keeping in these lines, the company has been constantly developing its e-commerce portal as per evolving consumers’ needs. In doing so, it made substantial investments to boost its online presence and improve shopping experience for customers. Additionally, expansion plans such as Retail Inventory Online; Infinite UGG; Buy Online, Return In Store; and Click and Collect to enhance customers’ shopping experience bode well.

Apart from these, the company boasts strong product portfolio — including Koolaburra, HOKA ONE ONE and UGG brands. Sturdy performances in these brands are likely to strengthen its position in the near term as well. 

Encouragingly, management now anticipates net sales of $2.150-$2.160 billion, which indicates growth of 6-7% from the year-ago reported figure. The company had earlier projected net sales of $2.115-$2.140 billion. It also forecasts adjusted earnings of $9.40-$9.50 per share, whereas it reported $8.84 in fiscal 2019. Management had previously anticipated earnings of $8.90-$9.05 per share.

Other Consumer Discretionary Stocks

Ralph Lauren Corporation (RL - Free Report) has an expected long-term earnings growth rate of 9.6%. It presently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

GIII Apparel Group (GIII - Free Report) has an expected long-term earnings growth rate of 11.4%. It currently sports a Zacks Rank #1.

lululemon athletica inc. (LULU - Free Report) , currently a Zacks Rank #2 (Buy) stock, has an expected long-term earnings growth rate of 18.9%.

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