Core Insights - The consumer discretionary sector has several oversold stocks, presenting potential buying opportunities for undervalued companies [1] - The Relative Strength Index (RSI) is a key indicator for identifying oversold conditions, typically below 30 [1] Company Summaries - **Dutch Bros Inc (NYSE:BROS)**: - RSI Value: 27.5 - Recent stock performance: Fell 1% to close at $52.57 - Analyst rating: Outperform with a price target of $85; stock has dropped approximately 28% in the past month, with a 52-week low of $30.49 [8] - **Goodyear Tire & Rubber Co (NASDAQ:GT)**: - RSI Value: 16.8 - Recent stock performance: Fell 4.6% to close at $7.50 - Analyst rating: Neutral with a price target of $10; stock has decreased around 11% in the last five days, with a 52-week low of $7.43 [8] - **Deckers Outdoor Corp (NYSE:DECK)**: - RSI Value: 27.7 - Recent stock performance: Fell 2.4% to close at $103.28 - Analyst rating: Underperform with a price target of $100; stock has declined about 16% over the past month, with a 52-week low of $93.72 [8]

Industry Overview - The outdoor industry encompasses recreation, wellness, and lifestyle experiences focused on nature and activities away from home, including outdoor gear, apparel, recreational vehicles, and services for hiking, camping, boating, and off-roading [1] - The industry is experiencing steady demand driven by shifting consumer values towards health, sustainability, and experience-driven living, benefiting various age groups and regions [2] Company Highlights Carnival Corporation & plc (CCL) - Carnival is experiencing resilient travel demand, stronger booking trends, and higher onboard spending, leading to an increase in its full-year 2025 guidance [6][9] - The company is focusing on fleet optimization, new ship launches, and targeted marketing investments to capture rising global demand, with plans for six additional AIDA ships to undergo refurbishment [7] - Carnival's expected revenue and earnings growth rates for the current year are 6% and 42.3%, respectively, with a recent improvement in the Zacks Consensus Estimate for current-year earnings by 0.5% [8] Norwegian Cruise Line Holdings Ltd. (NCLH) - Norwegian Cruise Line is benefiting from strong consumer demand and solid onboard spending, achieving record advance ticket sales of $4 billion [11] - The company is focusing on fleet management and new ship additions, with a new revenue management system expected to be completed by the end of 2025 [12] - NCLH's expected revenue and earnings growth rates for the current year are 6% and 13.2%, respectively, with a recent improvement in the Zacks Consensus Estimate for current-year earnings by 1% [13] Deckers Outdoor Corp. (DECK) - Deckers Outdoor has entered fiscal 2026 with strong momentum, achieving record first-quarter results driven by HOKA and UGG brands, which exceeded expectations [14] - The company anticipates year-over-year increases of 14.6% and 6.7% in net sales for HOKA and UGG, respectively, supported by a balanced channel strategy and solid financial position [15] - DECK's expected revenue and earnings growth rates for the current year are 9% and almost flat, respectively, with a recent improvement in the Zacks Consensus Estimate for current-year earnings by 17.9% [17]

Core Insights - Deckers Outdoor (NYSE: DECK) has experienced its 7th consecutive day of losses, resulting in a total decline of -11% during this period [1] - Concerns are rising regarding the potential slowdown in growth for Deckers' key brands, particularly Hoka, alongside a decrease in U.S. consumer spending impacting demand [1] - The company's market capitalization has decreased by approximately $1.7 billion, now standing at around $16 billion, and the stock is currently 47.9% lower compared to the close of 2024 [3] Financial Performance - The ongoing decline in DECK stock contrasts sharply with the S&P 500, which has recorded year-to-date returns of 12.3% [3] - The stock's performance over various time frames indicates a significant downturn, raising questions about whether this trend signifies deeper issues or presents a potential buying opportunity [5] Market Context - Deckers Outdoor manufactures footwear, apparel, and accessories for both casual and high-performance applications, with a retail presence of 140 global locations as of March 2021 [4] - The current market sentiment reflects a broader trend, with 113 S&P constituents experiencing three or more consecutive losses, indicating a challenging environment for many companies [6]

Core Viewpoint - Deckers (DECK) has experienced a decline in stock price and is facing challenges in keeping up with sector performance, while upcoming earnings are anticipated to show a slight year-over-year decline in earnings per share but an increase in revenue [1][2]. Financial Performance - Deckers closed at $105.83, down 4.85% from the previous day, underperforming compared to the S&P 500's loss of 0.5% [1]. - Over the last month, Deckers shares decreased by 4.71%, while the Retail-Wholesale sector gained 0.66% and the S&P 500 gained 2.74% [1]. - Analysts expect Deckers to report earnings of $1.57 per share, reflecting a year-over-year decline of 1.26%, with revenue projected at $1.41 billion, indicating a 7.67% increase year-over-year [2]. - For the full year, earnings are projected at $6.33 per share and revenue at $5.43 billion, representing no change in earnings and a 9.01% increase in revenue from the prior year [3]. Analyst Estimates and Ratings - Recent changes in analyst estimates for Deckers suggest a positive outlook, with a 0.66% increase in consensus EPS projection over the past 30 days [5]. - Deckers currently holds a Zacks Rank of 2 (Buy), indicating a favorable investment rating [5]. Valuation Metrics - Deckers is trading at a Forward P/E ratio of 17.58, slightly below the industry average of 17.6, suggesting it may be undervalued [6]. - The company has a PEG ratio of 4.2, compared to the Retail-Apparel and Shoes industry average of 2.32, indicating a higher expected earnings growth rate relative to its price [7]. Industry Context - The Retail-Apparel and Shoes industry is ranked 149 out of over 250 industries, placing it in the bottom 40%, which may impact Deckers' performance [7][8].

Group 1 - Analysts are optimistic about Deckers Outdoor Corporation (NYSE: DECK) due to the growth of its Hoka brand, which is experiencing approximately 20% growth and is expected to maintain double-digit growth for the remainder of the year [1][2] - The UGG brand has shown a significant recovery with a 19% growth last quarter compared to a mere 3% in the previous quarter, indicating strong brand momentum [2] - International sales for Deckers grew by 50% last quarter, suggesting substantial global market opportunities for expansion [2] Group 2 - Despite the positive brand performance, there are concerns regarding Deckers' expansion capabilities, particularly in the U.S. market, where sales are declining [2] - The stock faced a decline in January after the company's fiscal-year revenue forecast did not meet Wall Street expectations, despite higher sales in its key brands [2] - Some analysts believe that other AI stocks may offer better investment returns compared to Deckers, indicating a competitive investment landscape [3]

Core Insights - Deckers Outdoor Corporation (DECK) reported strong first-quarter fiscal 2026 results, driven by flagship brands HOKA and UGG, with revenues of $964.5 million, a 17% year-over-year increase, and earnings per share rising 24% to 93 cents, indicating robust consumer demand [1][11] Group 1: Brand Performance - HOKA emerged as the primary growth driver, achieving record quarterly revenues of $653.1 million, a 19.8% increase from the prior year, supported by global wholesale expansion and strong international demand [2][11] - UGG experienced 18.9% growth, reaching $265.1 million, marking its largest June quarter in history, with success attributed to diversification into men's footwear and year-round styles [3][11] Group 2: Strategic Initiatives - The company’s 365 initiative has successfully broadened UGG's consumer base while maintaining its iconic appeal, aided by strong wholesale momentum and new product launches [3][11] - Deckers has implemented selective price increases and operational efficiencies to counteract rising tariffs and freight costs, although these measures may impact near-term profitability [4][5] Group 3: Future Outlook - For second-quarter fiscal 2026, net sales are projected between $1.38 billion and $1.42 billion, with HOKA expected to grow by 10% and UGG anticipated to see mid-single-digit growth [6] - Deckers is well-positioned for continued long-term growth, with HOKA leading performance in running and UGG evolving into a versatile lifestyle brand [5]

Group 1 - The article highlights that NIKE (NKE) is facing challenges in maintaining reasonable growth, while smaller brands like Deckers Outdoor's Hoka and On Holding are performing better [1] - The performance of smaller brands suggests a shift in consumer preferences towards niche and specialized athletic footwear [1]

Core Insights - The Nasdaq index has surged nearly 50% since April, indicating potential overvaluation from a technical perspective, with a notable 6% increase since September [1] - Investors are encouraged to take advantage of the current market conditions to purchase high-quality large-cap stocks that are trading below their historical highs [2] Company Overview: Deckers Brands - Deckers Brands (DECK) is recognized for its strong management, solid balance sheet, and promising growth outlook, having outperformed the S&P 500 over the last decade [3][4] - The stock has increased approximately 1,100% over the past ten years, significantly outperforming the S&P 500's 260% and Nike's 25% [4] - The growth of Deckers is largely attributed to its high-end running shoe brand HOKA, which has achieved a compound annual growth rate of around 50% over the last four years [7] Financial Performance - Deckers has experienced an average revenue growth of 19% from FY21 to FY25 and a 32% increase in GAAP earnings per share (EPS) [8] - Following a Q3 FY25 earnings release that provided weaker guidance, DECK stock fell approximately 48% from its all-time highs [11] - The stock is currently trading at a 30% discount to the Retail-Wholesale sector and 22% below the S&P 500, despite outperforming both by about four times over the past decade [16] Technical Analysis - Deckers stock found support at its long-term 200-week moving average, which has historically indicated potential for upward movement [12] - The stock is trading in line with its 10-year median at 18.1X forward 12-month earnings, suggesting it may be undervalued [16] Future Outlook - Revenue for Deckers is projected to grow by 9% in FY26 and 7% in FY27, with adjusted earnings expected to remain flat year-over-year in FY26 before increasing by 8% in FY27 [15] - The company maintains a robust balance sheet with $1.7 billion in cash and equivalents, $3.8 billion in total assets, and no debt, positioning it well to navigate economic uncertainties [17]

Core Viewpoint - Deckers Outdoor's brands Uggs and Hoka are experiencing a loss of sales momentum, which is expected to pressure the company's profit margins. Bernstein has rated Deckers as "underperform" with a target price of $100 [1] Group 1: Hoka Brand Analysis - Hoka has reached saturation in the U.S. running shoe market and is exiting a prolonged popularity cycle. Future growth rates are expected to slow to high single digits, primarily driven by international markets [1] - Hoka's cushioning technology has been imitated by competitors, and retailers are showing fatigue towards this trend. Nike's strong return in the running shoe sector poses a threat due to its more extensive product line, while On Running continues to expand its market share [2] Group 2: Uggs Brand Analysis - Uggs has seen significant growth in the global casual shoe market, but this category is gradually shrinking as consumers shift towards athletic shoes. The growth rate for Uggs is projected to be around 4%, a decline from the double-digit growth rates seen in previous years [2] Group 3: Financial Performance - Deckers' stock has declined by 43% year-to-date, closing at $115.43, down 2.74% as of the last trading day [3] - Despite both brands currently being profitable with gross margins close to 60%, the anticipated slowdown in growth and shifts in revenue structure towards wholesale and lower-priced categories are expected to gradually decrease profit margins. A forecasted decline of 190 basis points in gross margin is expected from fiscal year 2026 to 2030 [1]

Core Viewpoint - Deckers Outdoor Corp (NYSE:DECK) is facing challenges with its two main products, Uggs and Hoka, as sales appear to be declining, which may lead to margin pressure for the company [2] Product Performance - Sales of Uggs and Hoka are reportedly losing momentum, indicating potential difficulties in sustaining growth for these key products [2] Financial Outlook - The current situation has prompted Bernstein to assign an Underperform rating to the company, with a target price set at $100 [2]