Why Deckers (DECK) Appears to Be a Promising Pick for 2024?
Deckers Outdoor Corporation DECK, headquartered in Goleta, CA, has showcased a robust stock market performance, appreciating by 38.2% compared with the industry’s 27.5% growth in the six-month period. This growth trajectory is primarily attributed to the strong market reception of its UGG and HOKA brands, particularly in the direct-to-consumer segment. As a Zacks Rank #2 (Buy) company, Deckers’ solid operational strategy and resilient balance sheet have been pivotal in underpinning this expansion.
Strategic Investments for Long-Term Success
Deckers growth strategy includes a commitment to strategic investments in areas crucial for long-term success, such as innovation, marketing and talent development. These investments are key to sustaining the company's growth trajectory as it plans to further enhance its infrastructure capabilities to meet evolving customer demands efficiently. An essential part of this strategy involves bolstering global consumer awareness and adoption which will be achieved through launching innovative product offerings and executing global marketing campaigns that resonate with diverse consumer segments.
Furthermore, Deckers is focused on its marketplace management strategy, especially in Europe and Asia. This involves building brand acceptance and creating brand 'heat' through localized marketing initiatives.
Looking into fiscal 2024, Deckers is on a trajectory for significant growth, with a projected revenue of $4.025 billion. This estimate indicates an 11% increase from the previous year, showcasing the company's robust market presence and effective business strategies. This expected growth is driven by the performance of Deckers leading brands, UGG and HOKA.
The company aims to maintain a competitive edge with a gross margin between 52.5% and 53% and an operating margin of about 18.5%. In addition, DECK targets EPS in the range of $22.90-$23.25, reflecting its strong financial health and confidence in continued profitability.
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Resilient Financial Growth
Deckers stands as a resilient force in the market, backed by a robust growth trajectory, strategic investments and a commitment to global expansion. Investors eyeing a promising growth may find Deckers an enticing addition to their portfolios.
The Zacks Consensus Estimate projects a robust top-line growth of 11.7% and a bottom-line increase of 21.9% for the current fiscal year. This trend is anticipated to extend into the next fiscal period. DECK has consistently delivered an average earnings surprise of 26.3% over the trailing four quarters, underscoring its strong financial management and market performance.
Deckers’ robust financial results and strategic expansion of its brands position it as an attractive investment choice for 2024, with the potential to deliver returns that outperform the market.
Other Key Picks
Hibbett Sports HIBB, an athletic-inspired fashion focused company, currently sports a Zacks Rank #1 (Strong Buy). HIBB delivered an average earnings surprise of 24.17% for the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Hibbett Sports’ current fiscal-year sales suggests growth of 1.7% from the year-ago reported number. The consensus estimate for EPS indicates a decline of 15.1%from the year-ago reported figure.
Abercrombie & Fitch ANF, operates as a specialty retailer of premium, high-quality casual apparel for men, women, and kids, flaunts a Zacks Rank #1. ANF delivered an average earnings surprise of 712.9% in the trailing four quarters.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and earnings suggests growth of around 15% and 2320%, respectively, from the year-ago reported numbers.
The Gap GPS, a premier international specialty retailer, sports a Zacks Rank #1. GPS delivered a trailing four-quarter earnings surprise of 137.8%, on average.
The Zacks Consensus Estimate for The Gap’s current fiscal-year sales suggests a decline of 5.1% from the year-ago actual. The consensus estimate for EPS implies 387.5% growth from the year-ago reported level.
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