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Deckers Banks on Omni-Channel Expansion, Strategic Plans

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In order to keep up with changing trends, Deckers Outdoor Corporation DECK focuses on enhancing omni-channel capabilities, product innovation and store expansion. This Zacks Rank #1 (Strong Buy) company has been constantly developing its e-commerce portal to capture incremental sales.

The company has made substantial investments to strengthen its online presence and improve shopping experience for its customers. The company is focused on opening smaller concept omni-channel 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.

Further, the company, which shares space with Steven Madden, Ltd. SHOO, had announced plans to optimize its store fleet by focusing on striking a balance between digital and physical stores. Toward this, Deckers has chalked out plans to close approximately 30 to 40 outlets over the next two years. Moreover, management expects cost savings of about $150 million on improvement in cost of goods sold and SG&A savings. This will help realize $100 million in operating profit improvement by fiscal 2020.

Apart from these, management’s long-term target has instilled investors’ confidence in the stock. Management had earlier informed that it expects total sales of about $2 billion, with operating margin of 13%, by fiscal 2020.

For fiscal 2019, management anticipates net sales in the band of $1,925-$1,950 million, reflecting year-over-year growth of about 2%. Further, adjusted earnings are projected at $6.20-$6.40 per share, up from $5.74 reported in fiscal 2018. Gross margin for the fiscal is expected to be marginally better than 49%. Operating margin is envisioned in the range of 12.6-12.8% for fiscal 2019 compared with 12.4% reported in the prior fiscal.

These endeavors have helped the company’s shares gain 19.8% in the past three months, outperforming the industry's increase of 11.6% and the S&P 500’s rise of 4.2%.

Looking for Other Hot Stocks? Consider These

Wolverine World Wide, Inc. WWW has a long-term earnings growth rate of 10% and carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Iconix Brand Group, Inc. ICON has a Zacks Rank #2. The company has an impressive average positive earnings surprise of 188.2% for the last four quarters.

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Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
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