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Deckers Outdoor (DECK)
NYSE:DECK
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Deckers Outdoor
(NYSE:DECK)
83Outperform
Positive Factors
Brand Strength
The health of the HOKA and UGG brands remains strong, suggesting potential for future growth.
Consumer Demand
Management sounded very positive on underlying demand for both HOKA and UGG and did not cite any concerns on the macro front, pointing out their brands continue to resonate with the consumer globally.
New Product Launches
New product launches and improved weather conditions are seen as near-term catalysts that could boost sales.
Negative Factors
Competition
Intense competition in the running space and potential international growth challenges may affect the stock's performance.
Guidance and Expectations
Shares dropped by 16% following a disappointing Q4 guidance, suggesting a decline in sales.
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
$16.57B
Dividend YieldN/A
Average Volume (3M)3.22M
Price to Earnings (P/E)17.7
Beta (1Y)0.93
Revenue Growth19.40%
EPS Growth32.70%
CountryUS
Employees4,800
SectorConsumer Cyclical
Sector Strength67
IndustryApparel - Footwear & Accessories
Share Statistics
EPS (TTM)6.16
Shares Outstanding151,773,640
10 Day Avg. Volume2,270,011
30 Day Avg. Volume3,220,051
Financial Highlights & Ratios
PEG Ratio0.54
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.75
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit12.14
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$180.59Price Target Upside61.69% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
Deckers Outdoor Business Overview & Revenue Model
Company DescriptionDeckers Outdoor Corporation, together with its subsidiaries, designs, markets, and distributes footwear, apparel, and accessories for casual lifestyle use and high-performance activities. The company offers premium footwear, apparel, and accessories under the UGG brand name; sandals, shoes, and boots under the Teva brand name; and relaxed casual shoes and sandals under the Sanuk brand name. It also provides footwear and apparel for ultra-runners and athletes under the Hoka brand name; and fashion casual footwear using other plush materials under the Koolaburra brand. The company sells its products through department stores, domestic independent action sports and outdoor specialty footwear retailers, and larger national retail chains, as well as online retailers. It also sells its products directly to consumers through its retail stores and e-commerce websites, as well as distributes its products through distributors and retailers in the United States, Europe, the Asia-Pacific, Canada, Latin America, and internationally. As of March 31, 2022, it had 149 retail stores, including 75 concept stores and 74 outlet stores worldwide. The company was founded in 1973 and is headquartered in Goleta, California.
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 Key Performance Indicators (KPIs)
Any
Revenue by Channel
Analyzes sales through different channels like online, retail stores, and wholesale, highlighting the company's distribution strategy and adaptability to consumer shopping preferences.
Analyzes sales through different channels like online, retail stores, and wholesale, highlighting the company's distribution strategy and adaptability to consumer shopping preferences.
Data provided by:
Main Street Data
Main Street DataDeckers 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
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.89
Very Positive
Balance Sheet
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.85
Very Positive
Cash Flow
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.92
Very Positive
| Breakdown | ||||
| Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.29B | 3.63B | 3.15B | 2.55B | 2.13B | Gross Profit |
| 2.39B | 1.83B | 1.61B | 1.37B | 1.10B | EBIT |
| 927.51M | 652.75M | 564.71M | 504.20M | 338.13M | EBITDA |
| 1.04B | 719.53M | 611.15M | 548.81M | 384.82M | Net Income Common Stockholders |
| 759.56M | 516.82M | 451.95M | 382.57M | 276.14M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.50B | 981.79M | 843.53M | 1.09B | 649.44M | Total Assets |
| 3.14B | 2.56B | 2.33B | 2.17B | 1.77B | Total Debt |
| 266.88M | 246.49M | 222.07M | 223.04M | 295.72M | Net Debt |
| -1.24B | -735.31M | -621.46M | -866.32M | -353.72M | Total Liabilities |
| 1.03B | 790.47M | 793.42M | 723.48M | 625.00M | Stockholders Equity |
| 2.11B | 1.77B | 1.54B | 1.44B | 1.14B |
| Cash Flow | Free Cash Flow | |||
| 943.82M | 456.40M | 121.34M | 564.00M | 253.88M | Operating Cash Flow |
| 1.03B | 537.42M | 172.35M | 596.22M | 286.33M | Investing Cash Flow |
| -89.33M | -81.01M | -51.01M | -32.17M | -31.96M | Financing Cash Flow |
| -417.68M | -309.03M | -367.48M | -129.58M | -192.11M |
Deckers Outdoor Technical Analysis
Neutral
111.69
Price Trends
120.50
Negative
159.56
Negative
159.72
Negative
Market Momentum
-3.64
Negative
48.73
Neutral
76.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DECK, the sentiment is Neutral. The current price of 111.69 is above the 20-day moving average (MA) of 107.92, below the 50-day MA of 120.50, and below the 200-day MA of 159.72, indicating a neutral trend. The MACD of -3.64 indicates Negative momentum. The RSI at 48.73 is Neutral, neither overbought nor oversold. The STOCH value of 76.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $16.57B | 17.72 | 39.80% | ― | 19.40% | 32.70% | |
77 Outperform | $5.39B | 6.02 | 57.76% | ― | 3.53% | 24.55% | |
75 Outperform | $9.65B | 40.68 | 8.52% | ― | 20.40% | 134.09% | |
73 Outperform | $7.44B | 11.92 | 14.67% | ― | 10.66% | 9.44% | |
70 Outperform | $1.52B | 8.89 | 20.20% | 4.04% | 15.03% | 1.51% | |
61 Neutral | $1.05B | 22.43 | 15.57% | 3.14% | -21.75% | ― | |
60 Neutral | $6.87B | 11.73 | 3.11% | 4.16% | 2.36% | -22.03% |
* Consumer Cyclical Sector Average
Performance Comparison
DECK
Deckers Outdoor
111.69
-24.72
-18.12%
CROX
Crocs
96.10
-28.27
-22.73%
SKX
Skechers USA
48.68
-17.37
-26.30%
SHOO
Steven Madden
20.97
-18.58
-46.98%
WWW
Wolverine World Wide
13.11
2.63
25.10%
BIRK
Birkenstock Holding plc
50.93
6.16
13.76%
Deckers Outdoor Earnings Call Summary
Earnings Call Date:Jan 30, 2025
(Q3-2025)
| % Change Since: -49.94%|
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.Q3-2025 Updates
Positive Updates
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.
Negative Updates
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.