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Deckers Rallies More Than 26% on Solid Growth Strategies

Zacks Equity Research

Shares of Deckers Outdoor Corporation DECK have rallied approximately 26.5% compared with the industry’s growth of 1.7% and against the overall Consumer Discretionary sector’s decline of 3.2%.



Let’s delve deeper into the factors that make this Zacks Rank #1 (Strong Buy) stock a promising bet.

Key Catalysts

Deckers is poised on product innovations, store expansion and enhancement of e-commerce capabilities. Moreover, its focus on expanding brand assortments, bringing in more innovative line of products, targeting consumers digitally and optimizing omni-channel distribution bodes well.

Further, the company has been constantly developing its e-commerce portal to capture incremental sales in order to keep up with the changing trends. Also, Deckers has made substantial investments to strengthen online presence and open smaller concept omni-channel outlets. Its focus on expanding programs — Retail Inventory Online; Infinite UGG; Buy Online, Return In Store; and Click and Collect — to enhance customers’ shopping experience is an added positive.

Deckers is focusing on product and marketing strategies that are more skewed toward customers. Moreover, the company is focusing on expanding its product categories according to customers’ purchasing trends that change with weather. Also, in order to capture incremental sales and margins, the company is selling directly to wholesale customers.

These well-chalked efforts along with impressive growth across UGG, HOKA ONE and Koolaburra brands have contributed to the company’s third-quarter fiscal 2019 results. In fact, this was the eighth straight quarter of positive sales and earnings surprises. Further, the company’s top and bottom lines improved year over year. Impressive performance prompted management to raise fiscal 2019 view.

The company now anticipates fiscal 2019 net sales of $1.986-$2.0 billion, up from its prior projection of $1.935-$1.960 billion. Adjusted earnings are projected to be $7.85-$7.95 per share, up from $5.74 reported in fiscal 2018. The company had earlier guided adjusted earnings to be $6.65-$6.85 per share.

All said, we believe that Deckers’ growth plans will help it keep the stellar show on.

Looking for More? Check These Solid Picks

Skechers U.S.A., Inc. SKX has a long-term earnings growth rate of 7% and carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NIKE, Inc. NKE has a long-term earnings growth rate of 12.3% and holds a Zacks Rank #2.

Xtep International Holdings XTEPY has a long-term earnings growth rate of 11% and carries a Zacks Rank #2.

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Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
 
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