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Deckers (DECK) Glimmers on Digital Capabilities & Strong Brands

·4 min read

Consumers’ inclination toward shopping for outdoor apparel and accessories is gradually returning to normal, since pandemic-led restrictions have been relaxed and socialization is picking up pace. The trends are helping sports brands like Deckers Outdoor Corporation DECK. This well-known outdoor sports and other lifestyle-related footwear and accessories company is witnessing growth across its brands and e-commerce platform. Its strategic endeavors to boost offerings, marketing and omni-channel capabilities are noteworthy.

Shares of the company have rallied 25.1% in the past three months compared with the industry’s rise of 21.8%. Let’s take a closer look into the factors driving this Zacks Rank #1 (Strong Buy) company. You can see the complete list of today’s Zacks #1 Rank stocks here.

Online Expansion Bodes Well

To cater to consumers’ growing preference for online shopping, Deckers has been constantly developing its e-commerce portal and generating incremental sales. The company has invested substantially to strengthen its online presence and improve shopping experience for its customers. The company is focused on opening smaller concept omni-channel outlets. Continued efforts to boost digital sales are likely to keep favoring the company’s direct-to-consumer sales channel. During the first quarter of fiscal 2022, direct-to-consumer net sales increased 14.7% to $160.4 million. The company aims to build a direct-to-consumer business that will represent 50% of total revenues.

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Efforts to Boost Brand Strength

Deckers has been focusing on product and marketing strategies that are more skewed toward customers’ needs. The company is expanding its brand lines and bringing more innovative products. Greater acceptance of the UGG brand across key markets and growth of the Teva brand are noteworthy. HOKA ONE ONE brand continues to build customer base through a combination of disruptive product innovation and disciplined marketing approach. The first quarter reflects on the progress Deckers is making toward attaining long-term goals. The milestones include building HOKA ONE ONE into a $1-billion plus brand and elevating UGG as a global lifestyle brand with diverse product offerings.

For fiscal 2022, management expects nearly 50% growth in the HOKA ONE ONE brand with revenues exceeding the $850-million target. For UGG, the metric is likely to grow in the high single-digit to low double-digit range. Teva brand revenues are expected to grow in the high teens range, while Koolaburra revenues are anticipated to improve in the low double-digit range.

Other Strategic Moves

eckers is targeting profitable and underpenetrated markets, by expanding assortment availability in both online and across stores. The company is focused on store expansion across key markets. In order to capture incremental sales and margins, the company is selling directly to wholesale customers. Even in the online channel, it is prioritizing direct-to-consumer acquisition.

Wrapping Up

Deckers is undertaking prudent efforts to stay strong in the sports apparel space, amid the pandemic. Such moves are likely to keep boosting its performance. Management provided an encouraging outlook for fiscal 2022. It envisions net sales in the range of $3.010-$3.060 billion, suggesting an increase of 18-20% from $2.546 billion reported in fiscal 2021. Earnings are projected in the band of $14.45-$15.10 per share, calling for an increase from earnings of $13.47 reported in the last fiscal.

3 Shoes & Apparel Picks You Can’t Miss

Tillys, Inc. TLYS, flaunting a Zacks Rank #1, has a long-term earnings growth rate of 10%.

Foot Locker, Inc. FL, also sporting a Zacks Rank #1, has a long-term earnings growth rate of 4%.

Steven Madden, Ltd. SHOO, with a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 15%.


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Deckers Outdoor Corporation (DECK): Free Stock Analysis Report

Foot Locker, Inc. (FL): Free Stock Analysis Report

Steven Madden, Ltd. (SHOO): Free Stock Analysis Report

Tillys, Inc. (TLYS): Free Stock Analysis Report

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