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Deckers Outdoor Corp. Message Board

  • jimmach123 jimmach123 Oct 13, 2013 8:23 AM Flag

    My take...

    I have not done my normal channel checks on this stock, but rode it on the way down when it was at nosebleed levels 2 years ago...easy to see the fall when I taught in the Big 10 school as the weather was too warm and the girls had switched styles to the riding boots. I need to get down to White Plains or NYC to see the environment (WP had a store open in the last year at the fashion mall). Looking at the company:
    Strengths: Name brand is relatively firm with a solid website/FB. They have a solid customer base in younger women, are trying to build one in men, and the sandal companies are growing well. If the winters is cold, then weather is a strength for strong sales. They are opening their own stores which means more shelf space and the ability for customers to see their entire product line, not just dept. store lineups. The stores must still provide a better margin.Expansion to SAMS will give this more of a customer base.
    Weaknesses: Weather...another 2011 Winter will be a disaster for X-Mas earnings. Opening your own stores has risks - hiring employees, paying overhead, and hoping you are opening in the right locale. Lack of waterproofing: Young consumers are fickle, and one solid foot-soaking can break the camel's back in abandoning the brand. Expansion to SAMS...why notCostco? Costco is definitely middle to upper class, the target customer. Have to also wonder if the margin is being hit with this move.
    Opportunities: Continues expansion; waterproofing UGGS; Male customer base building; diversifying into other styles for fall & spring.
    Threats: Patent/Copyright infringement; Warm and wet winter weather; dropping margins and sales; Brand recognition dropping or brand becoming the 2011 Blackberry to youth buyers.
    Final takeway: I see this dropping into the upper 50s this week, and possibly lower 50s after earnings. However, it is likely it will be back to 75 after next Q depending on the weather. I have been wrong, but see weakness as a time to buy.

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    • Aww Jim, your logic has no place here we have over 27,000 likes! That should say it all. Think like an investor that has done no Due Diligence on this company and just invest. You are now thinking outside the box with all that logic and all. Just remember over 27,000 likes and more to come!

      Sentiment: Sell

      • 1 Reply to kwitchurbellyak
      • Thanks - appreciate the comment. My two cents, take it with a grain of salt as I have been wrong in the past and am human. I have been pretty right the last couple months with SAM, ULTA, NKE, and BBBY. But I also did poorly with TIF and bought calls on DECK too early, but have hedged down with puts.

        With respect to thinking outside the box, there is a good article out there from Harvard Business Review about "thinking inside the box" and using a simple logic tree in developing operations and strategy - I give it to my Cadets to read when prepping their strategic communication plans for military operations, but it is exceptional in the idea of just looking at ends and determining logical ways/means to arrive there based on the environment around you. I used this logic idea for shorting DECK in Oct-Nov 2011 and BBRY around Mar 2011 as well when I noticed none of my students had any RIM products. That was a beauty from 80 down and very easy to see a company in entropy.

        With that, FB is useful to put out a message and help educate the audience. DECK shows how their FB "likes" have grown from 500K in 2011 to 2mil+ today...but what does a like mean? I like about 20+ different beers brewers on FB and sometimes like new products...do I buy every new beer (WOULD LOVE TO!)? No, and thus Gladwell and most researchers remain skeptical of its true effects (and any social media for that matter) other than getting easy likes or small comments with no required action. It is easy to click a like, semi-easy to order a pair of boots through Zappos or DECK's other distributors, but correlation does not equal causation and thus a like does not equal a sale. Most will see it on their feed, click like; a small percentage will order a pair right then; many will have a mental note to check it out later; most will simply smile, click, and move onto the next shiny object.

    • Jimmach, I laugh at guys like you, I really do. It is looking at something the completely the wrong way that is the reason you are so clueless.

      Firstly, as an investor in a company, you want a company to pursue every oppurtunity to grow. The customers in Sams clubs children ALREADY WEAR UGGS or are buying some knockoff brand that looks like UGGS. So buying going directly in their faces of where they shop, you grab those customers.

      Secondly, while UGGS is looked at as a high end luxury, it doesn't mean pursuit of different avenues of growth is a negative. The negative would be if the company were lowering its prices and hitting our bottom line for the growth. Otherwise, this is what we want. This nonsense idea of somehow "cheapening" the brand is bogus.

      Apple ipod and iphones were/are owned by so many people. Its current troubles have nothing to do with the "cheapness" or "cheapening" of the brand because everyone has an iphone or ipad; its because they have no innovation and plenty of competetition.

      Deckers is innovating its UGG brand. It is offering us the investors growth, WHAT WE WANT!, especially international, and the brand will become even more known than it is known due to its expansion.

      Management was calling for double digit profit margins a few years out over half a year ago. I don't see how that plan has changed. UGG Pure is only 10% integrated. When it is more than 50% 2-3 seasons from now, this brand will have more than 200 stores in 2015, and more of an international footpring.

      You sir have no idea what you are talking about.

      Z

      • 1 Reply to questioncnbc
      • "The customers in Sams clubs children ALREADY WEAR UGGS or are buying some knockoff brand that looks like UGGS. So buying going directly in their faces of where they shop, you grab those customers."

        Really? Have you been to a SAMS in your entire life? As I said, Costco fits the target customer. I see this move as overly risky and likely ineffective based on SAMS track record of bringing in high-end Christmas items with failed results. Also, WMT tends to cut margins and you have no idea what they will sell the products for or how much they are paying DECK...WMT pulls special prices with everyone, and SAMS will be no different.

        "Apple ipod and iphones were/are owned by so many people. Its current troubles have nothing to do with the "cheapness" or "cheapening" of the brand because everyone has an iphone or ipad; its because they have no innovation and plenty of competetition."

        So, move to a straw man argument...you should be a politician with this skill. So UGG has no competition? If that is the case, what happened in 2011? How many rip-offs are now made? If they are not in style or weather is too warm, very simply, they don't sell. Also looking at their investor's presentation, there is plenty of competition with alternatives and that darn leather riding boot from Madden and KORS keeps pulling away sales.

        I understand they are expanding. I understand the stores are doing well - but again, when 80% of your revs come from one line, that is dangerous, and in fashion, even more dangerous. I wish you the best of luck...I am no longer going to read anything you write on this board as I find your lack of ability in arguing anything of sound logic or to even look at the opposing view to problematic. You are too bullish for me and too much of pom-pom cheerleader for DECK. It is emotional for you and with any stock that is very dangerous - but then again, after doing this for 12 years, I have no idea what I am talking about, so take it for what it is worth.

 
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