Deckers Outdoor (DECK) AI Stock Analysis

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Deckers Outdoor

(NYSE:DECK)

76Outperform

Deckers Outdoor receives a strong overall score driven primarily by its excellent financial performance and positive earnings call, which highlight robust revenue growth and profitability. Despite a bearish technical outlook and the absence of a dividend yield, the company's strategic expansion and brand strength provide a solid foundation for future growth.

Positive Factors

Brand Performance

The health of the HOKA and UGG brands remains strong, suggesting potential for future growth.

Demand Strength

The underlying demand for Hoka remains strong, as evidenced by a 28% increase in direct-to-consumer sales in the third quarter.

Product Launches

New product launches and improved weather conditions are seen as near-term catalysts that could boost sales.

Retail Partnerships

Hoka is among the fastest turning and highest margin brands to their key retail partners, and despite bigger brands looking to get back into running, they are confident retailers will continue to prioritize Hoka.

Negative Factors

Competition

Intense competition in the running space and potential international growth challenges may affect the stock's performance.

Market Performance

Shares are down 35% YTD compared to a 2% decrease in the broader market, indicating a significant underperformance.

Deckers Outdoor (DECK) vs. S&P 500 (SPY)

Market Cap

$17.61B

Dividend YieldN/A

Average Volume (3M)3.60M

Price to Earnings (P/E)18.8

Beta (1Y)0.97

Revenue Growth19.40%

EPS Growth32.70%

CountryUS

Employees4,800

SectorConsumer Cyclical

Sector Strength55

IndustryApparel - Footwear & Accessories

Share Statistics

EPS (TTM)6.16

Shares Outstanding151,773,640

10 Day Avg. Volume4,171,603

30 Day Avg. Volume3,595,409

Financial Highlights & Ratios

PEG Ratio0.58

Price to Book (P/B)N/A

Price to Sales (P/S)3.63

Price to Cash Flow (P/CF)4.10

P/FCF Ratio4.10

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$207.94

Price Target Upside89.67% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering17

Deckers Outdoor Business Overview & Revenue Model

Company DescriptionDeckers Outdoor Corporation is a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories. The company operates in the consumer goods sector with a focus on premium lifestyle brands. Its core products include footwear and fashion apparel, with well-known brands such as UGG, HOKA ONE ONE, Teva, Sanuk, and Koolaburra by UGG. Deckers is headquartered in Goleta, California, and is recognized for its commitment to high-quality craftsmanship and sustainable business practices.

How the Company Makes MoneyDeckers Outdoor Corporation generates revenue primarily through the sale of its branded footwear and apparel products. The company employs a multi-channel distribution strategy that includes selling directly to consumers via its branded retail stores and e-commerce platforms, as well as through wholesale partners and third-party retailers. A significant portion of Deckers' revenue comes from its flagship UGG brand, known for its luxurious comfort footwear. HOKA ONE ONE, another key brand, contributes to earnings with its high-performance athletic shoes. The company's financial performance is also bolstered by its strategic marketing efforts, brand loyalty, and international expansion initiatives. Partnerships with retailers and collaborations with celebrities and influencers further enhance brand visibility and drive sales.

Deckers Outdoor Financial Statement Overview

Summary

Deckers Outdoor displays excellent financial health across all verticals. The income statement shows strong growth and profitability, the balance sheet reflects low leverage and high equity, and the cash flow statement indicates robust cash generation capabilities. The company is well-positioned for continued growth, though vigilance on leverage and market conditions is advisable.

Income Statement

Very Positive

Deckers Outdoor shows strong profitability with a Gross Profit Margin of approximately 67.3% and a Net Profit Margin of 22.4% for TTM. Revenue growth is solid with a 15.7% increase from 2023 to 2024. EBIT and EBITDA margins are robust at 27.4% and 28.8% respectively, indicating operational efficiency. Overall, the company exhibits strong revenue growth and excellent profitability metrics.

Balance Sheet

Very Positive

The company maintains a healthy balance sheet with a low Debt-to-Equity ratio of about 0.08, indicating low leverage. The Equity Ratio stands at 66.4%, reflecting a strong equity position. Return on Equity is a strong 35.8% for TTM, highlighting effective use of shareholder funds. The balance sheet is strong, but monitoring leverage as the company grows is advised.

Cash Flow

Very Positive

Deckers Outdoor's cash flow is impressive, with a Free Cash Flow growth rate of 6.4% from 2023 to 2024, and an Operating Cash Flow to Net Income ratio of 1.16, indicating strong cash generation relative to net income. The Free Cash Flow to Net Income ratio is also high at 1.07, demonstrating effective cash management and reinvestment potential.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
4.92B	4.29B	3.63B	3.15B	2.55B	2.13B
	Gross Profit
2.83B	2.39B	1.83B	1.61B	1.37B	1.10B
	EBIT
1.15B	927.51M	652.75M	564.71M	504.20M	338.13M
	EBITDA
1.24B	1.04B	719.53M	611.15M	548.81M	384.82M
	Net Income Common Stockholders
942.23M	759.56M	516.82M	451.95M	382.57M	276.14M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
357.33M	1.50B	981.79M	843.53M	1.09B	649.44M
	Total Assets
578.92M	3.14B	2.56B	2.33B	2.17B	1.77B
	Total Debt
0.00	266.88M	246.49M	222.07M	223.04M	295.72M
	Net Debt
-357.33M	-1.24B	-735.31M	-621.46M	-866.32M	-353.72M
	Total Liabilities
65.70M	1.03B	790.47M	793.42M	723.48M	625.00M
	Stockholders Equity
512.42M	2.11B	1.77B	1.54B	1.44B	1.14B
Cash Flow		Free Cash Flow
1.00B	943.82M	456.40M	121.34M	564.00M	253.88M
	Operating Cash Flow
1.09B	1.03B	537.42M	172.35M	596.22M	286.33M
	Investing Cash Flow
-73.85M	-89.33M	-81.01M	-51.01M	-32.17M	-31.96M
	Financing Cash Flow
-418.21M	-417.68M	-309.03M	-367.48M	-129.58M	-192.11M

Deckers Outdoor Technical Analysis

Technical Analysis Sentiment

Negative

Last Price109.63

Price Trends

50DMA

135.58

Negative

100DMA

169.06

Negative

200DMA

162.75

Negative

Market Momentum

MACD

-9.49

Negative

RSI

31.92

Neutral

STOCH

20.74

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DECK, the sentiment is Negative. The current price of 109.63 is below the 20-day moving average (MA) of 114.11, below the 50-day MA of 135.58, and below the 200-day MA of 162.75, indicating a bearish trend. The MACD of -9.49 indicates Negative momentum. The RSI at 31.92 is Neutral, neither overbought nor oversold. The STOCH value of 20.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DECK.

Deckers Outdoor Risk Analysis

Deckers Outdoor disclosed 27 risk factors in its most recent earnings report. Deckers Outdoor reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Deckers Outdoor Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DECK	76 Outperform	$17.61B	18.84	39.80%	―	19.40%	32.70%
CROX	76 Outperform	$5.58B	6.23	57.76%	―	3.53%	24.55%
BIRK	75 Outperform	$9.03B	37.41	8.52%	―	20.40%	134.09%
SHOO	74 Outperform	$1.61B	9.41	20.20%	3.79%	15.03%	1.51%
SKX	70 Outperform	$7.55B	12.18	15.42%	―	12.11%	19.16%
WWW	59 Neutral	$999.16M	21.30	15.57%	3.24%	-21.75%	―
Sector *	59 Neutral	$11.76B	10.11	-0.70%	3.92%	1.27%	-16.30%

* Consumer Cyclical Sector Average

Performance Comparison

DECK

Deckers Outdoor

109.63

-27.03

-19.78%

CROX

Crocs

95.50

-33.91

-26.20%

SKX

Skechers USA

49.35

-7.77

-13.60%

SHOO

Steven Madden

21.18

-17.20

-44.82%

WWW

Wolverine World Wide

11.14

1.88

20.30%

BIRK

Birkenstock Holding plc

47.25

3.44

7.85%

Deckers Outdoor Earnings Call Summary

Earnings Call Date: Jan 30, 2025 | % Change Since: -50.86% | Next Earnings Date: May 22, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong performance for the quarter with record-breaking results and optimism for continued growth, particularly in the UGG and HOKA brands. While there are challenges anticipated for the fourth quarter, including inventory limitations and cost pressures, the overall outlook remains positive, buoyed by increased guidance and international market expansion.

Highlights

Record-Breaking Third Quarter Performance

Deckers achieved its largest and most profitable quarter in history with revenue growing 17% to $1.8 billion, gross margins improving to 60.3%, and diluted earnings per share increasing 19% to $3. The notable performance was driven by strong demand for UGG and HOKA brands.

Strong Brand Performance and Growth

UGG global revenue increased 16% to $1.2 billion, and HOKA global revenue rose 24% to $531 million, with UGG and HOKA both maintaining high levels of full-price sales and driving growth across both DTC and wholesale channels.

Increased Fiscal Year Revenue Outlook

The company's fiscal year 2025 revenue outlook was raised to just above $4.9 billion, representing approximately 15% growth, marking the fifth consecutive year of mid-teens or higher growth.

International Market Expansion

International markets saw a rise of 28% in revenue, indicating strong global demand and strategic international expansion for Deckers brands.

Lowlights

Anticipated Fourth Quarter Challenges

Normalization of promotional activity and freight cost pressures are expected to affect Q4 margins. Additionally, currency exchange rates pose a headwind for the upcoming quarter.

UGG Inventory Limitations

Despite strong year-to-date performance, UGG is limited by available inventory for the fourth quarter, potentially affecting growth.

Sunsetting Koolaburra Brand

Plans to phase out the Koolaburra brand standalone product collections and operations were announced, with a wind-down expected throughout 2025.

Company Guidance

During the Deckers Brands Third Quarter Fiscal 2025 Earnings Conference Call, the company provided optimistic guidance for the fiscal year. Highlights included a revenue growth expectation of 15%, driven by a 16% increase in UGG's global revenue to $1.2 billion and a 24% rise in HOKA's global revenue to $531 million. UGG saw balanced growth across direct-to-consumer (DTC) and wholesale channels, with significant gains in international markets. HOKA's expansion was supported by strategic product launches, including the Bondi 9 and Cielo X1, with strong consumer engagement at global events. The company anticipates a full-year gross margin of approximately 57% and an operating margin around 22%, despite challenges such as freight costs and foreign currency fluctuations. Deckers remains focused on long-term brand health, emphasizing innovation and strategic marketplace management.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.