Previewing Earnings for, First Solar, Deckers & Others

Indie Research

During earnings season, publishes a comprehensive 20- to 30-page Earnings Preview report for the week ahead each Friday.

Here is just a tiny sample of what wrote about Deckers Outdoor (Nasdaq: DECK - News) in its recent earnings preview:

Deckers Outdoor is engaged in the designing, producing, marketing and brand managing of footwear and accessories. The company sells its products, including accessories, such as handbags, headwear, packs and outerwear, through domestic retailers and international distributors and directly to consumers, both domestically and internationally, through its websites, call centers, retail concept stores and retail outlet stores. The company markets its products under three brands: UGG, Teva and Simple, and recently added a fourth in Sanuk. ...

The maker of the popular UGG boots posted a profit of $62.5 million for the third quarter, or $1.59 per share, compared to $42.1 million, or $1.07 per share, a year earlier. Analysts were looking for EPS of $1.35.

Revenue jumped 49.1% to $414.4 million, topping the $387.0 million analysts were expecting. Retail sales soared 72.1% to $34.7 million from $20.2 million, while same-store sales surged 15.4%. Domestic sales jumped 26.0% to $257.9 million, while ecommerce sales increased 18.3% to $10.3 million. International sales more than doubled to $156.4 million, up from $73.2 million last year.

Gross margins rose 190 basis points to 49.0%. ...

Outside of earnings, Deckers' UGG brand is riding many of the same tailwinds as other "affordable" luxury brands and remains extremely popular. Taking control of its European distribution and recent store growth, meanwhile, should set the stage for strong growth in the years ahead. The push of its new and improved men's line, featuring a marketing blitz with NFL superstar Tom Brady, is a bit of a

wild card to the Deckers story.

The Sanuk brand Deckers recently acquired also looks like it has a lot of potential. It has been a fast-growing brand that gets very strong reviews on shoe websites like Zappos. Given its scale, Deckers should be able to drive the brand to new heights despite paying a fairly high price to acquire it. That said, changing fashions are always a potential risk. ...

In its earnings previews, in addition to reviewing last quarter's earnings, looks at historical earnings data and EPS trends; examines past investor reactions to earnings in various contexts; gives options activity analysis; gives an opinion on both what earnings will look like and how investors will react based on the aforementioned data points; and also offers long-term investment analysis.

In its latest earnings preview, in addition to Deckers, looks at several other popular stocks still set to report earnings, including (NYSE: CRM - News), Monster Beverage (Nasdaq: MNST - News), Hewlett-Packard (NYSE: HPQ - News), First Solar (Nasdaq: FSLR - News), Skullcandy (Nasdaq: SKUL - News), and Target (NYSE: TGT - News).

Just a few of the recent calls has made for Q4 were:

  • to be bearish on Dell (Nasdaq: DELL - News) ahead of earnings.
  • to be bearish on Wal-Mart (NYSE: WMT - News) ahead of earnings.
  • to be bullish on Intuit (Nasdaq: INTU - News) ahead of earnings.
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