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Deckers' (DECK) Omni-Channel Efforts, Brand Strength Bode Well

·4 min read

Deckers Outdoor Corporation DECK appears strong on the back of its robust omni-channel expansion endeavors, brand strength, and impressive customer-centric product and marketing strategies. In keeping with the changing trends, DECK is constantly developing its e-commerce portal to capture the incremental sales. Moreover, its focus on expanding brand assortments, introducing more innovative line of products and ramping up store-growth initiatives are added positives.

This Goleta, CA-based player’s shares have increased 17.6% over the past three months against the industry’s 12.6% decline. A Growth Score of B for currently Zacks Rank #3 (Hold) Deckers further highlights its potential.

Analysts are also optimistic about Deckers. We note that the Zacks Consensus Estimate for Buckle’s current financial-year sales and earnings per share (EPS) is pegged at $3.49 billion and $18.10, respectively. These estimates suggest growth of 10.8% and 11.3%, respectively, from the corresponding year-ago reported figures.

Let’s Dig Deeper

Deckers is constantly developing its e-commerce portal to resonate well with the evolving trends and grab higher sales. Management 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. During the first quarter of fiscal 2023, direct-to-consumer net sales grew 15%, thanks to increasing customer acquisition and retention for the HOKA brand.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Talking of its brand strength, DECK has been witnessing momentum in its HOKA ONE ONE brand for sometime now. HOKA ONE ONE brand continues to build customer base through a combination of disruptive product innovation and a disciplined marketing approach. Net sales for the brand surged 54.9% to $330 million and surpassed the Zacks Consensus Estimate of $287.7 million in the fiscal first quarter.

HOKA ONE ONE brand’s international business surged 66%, while U.S. operations increased 49%. Direct-to-consumer business grew 58%, while sales through wholesale channel increased 53% from last year’s tally.

In addition, greater acceptance of the UGG brand's diverse product line along with progress in Europe and the Asia Pacific bodes well. Deckers is progressing toward building HOKA ONE ONE into a multibillion-dollar major player, elevating UGG as a global lifestyle brand with diverse product offerings round the year, and enhancing its direct-to-consumer business. Going forward, management plans to open additional retail stores for the HOKA ONE ONE brand and continue exploring opportunities to strategically expand the brand’s retail store fleet.

Additionally, Deckers has been implementing customer relationship management software and concentrating on its loyalty program for a while. Moreover, DECK is focusing on expanding its product categories according to the customer purchasing trends that differ with weather. DECK has been paying more emphasis on casual boots, winter and weather boots, and casual shoes for sometime now. All the aforesaid tailwinds are likely to continue driving Deckers’ sales and boost profitability.

Don’t Miss These Solid Bets

Here we highlighted three better-ranked stocks, namely, Designer Brands DBI, Buckle BKE and Capri Holdings CPRI.

Designer Brands designs, manufactures and retails footwear and accessories. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Designer Brands’ current financial-year revenues and EPS suggests growth of 6.9% and 23.5%, respectively, from the corresponding year-ago reported figures. DBI has a trailing four-quarter earnings surprise of 55.1%, on average.

Buckle is a renowned retailer of on-trend apparel, footwear and accessories. BKE currently has a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for Buckle’s current financial-year revenues and EPS suggests growth of 6.8% and 4.5%, respectively, from the corresponding year-ago reported figures. BKE has a trailing four-quarter earnings surprise of 12.7%, on average.

Capri Holdings, a global fashion luxury group of iconic brands Versace, Jimmy Choo and Michael Kors, carries a Zacks Rank of 2. CPRI has an expected EPS growth rate of 10.1% for three-five years.

The Zacks Consensus Estimate for Capri Holdings’ current financial-year sales and EPS suggests growth of 3.3% and 10.1%, respectively, from the corresponding year-ago reported numbers. CPRI has a trailing four-quarter earnings surprise of 32.4%, on average.


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Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
 
Buckle, Inc. The (BKE) : Free Stock Analysis Report
 
Capri Holdings Limited (CPRI) : Free Stock Analysis Report
 
Designer Brands Inc. (DBI) : Free Stock Analysis Report
 
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