Core Insights - Deckers (DECK) is positioned to potentially continue its earnings-beat streak, particularly in the upcoming report, as it has a history of exceeding earnings estimates [1] - The company has achieved an average surprise of 22.86% over the last two quarters, indicating strong performance [1] Earnings Performance - In the last reported quarter, Deckers posted earnings of $3 per share, surpassing the Zacks Consensus Estimate of $2.60 per share, resulting in a surprise of 15.38% [2] - For the previous quarter, the company exceeded expectations by reporting earnings of $1.59 per share against an estimate of $1.22 per share, delivering a surprise of 30.33% [2] Earnings Estimates and Predictions - Recent estimates for Deckers have been trending upward, with a positive Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of another earnings beat [5][8] - The current Earnings ESP for Deckers is +6.75%, suggesting that analysts have become more optimistic about the company's earnings prospects [8] Zacks Rank and Predictive Metrics - Deckers holds a Zacks Rank of 3 (Hold), which, when combined with a positive Earnings ESP, suggests a high probability of beating consensus estimates, with historical data showing nearly 70% success in such cases [6][8] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [7]

The stock market dropped sharply on Monday as tariff concerns, a falling dollar, and rising yields hit the stock market. Consumer goods companies look like they're facing a very uncertain year. The most notable moves on Monday came in home improvement retail, consumer retail, and fashion. Home Depot (HD -2.22%) dropped 3.6% on Monday, Lowe's Companies (LOW -2.83%) was down 2.8%, Boot Barn Holdings (BOOT -2.23%) fell 2.6%, and Deckers Outdoor (DECK -1.93%) had dropped 2% by market close. The bond market is e ...

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Core Viewpoint - Deckers (DECK) has experienced a stock return of -8.8% over the past month, underperforming the Zacks S&P 500 composite's -3.9% change and the Zacks Retail - Apparel and Shoes industry's -8.9% loss, raising questions about its near-term performance [1] Earnings Estimates Revisions - For the current quarter, Deckers is expected to post earnings of $0.55 per share, reflecting a decrease of -33.7% from the same quarter last year, with the Zacks Consensus Estimate changing by -2.4% over the last 30 days [4] - The consensus earnings estimate for the current fiscal year is $5.88, indicating a year-over-year increase of +21%, with a recent change of -1.2% [4] - For the next fiscal year, the consensus estimate is $6.52, suggesting an increase of +11% from the previous year, with a change of -1.2% over the past month [5] Revenue Growth Forecast - The consensus sales estimate for the current quarter is $983.39 million, indicating a year-over-year growth of +2.5% [9] - For the current fiscal year, the revenue estimate is $4.95 billion, reflecting a growth of +15.4%, while the next fiscal year's estimate of $5.42 billion indicates a change of +9.6% [9] Last Reported Results and Surprise History - Deckers reported revenues of $1.83 billion in the last quarter, representing a year-over-year increase of +17.1%, with an EPS of $3 compared to $2.52 a year ago [10] - The reported revenues exceeded the Zacks Consensus Estimate of $1.71 billion by +6.7%, and the EPS surprise was +15.38% [10] - The company has consistently beaten consensus EPS and revenue estimates in the trailing four quarters [11] Valuation - Deckers is graded C in the Zacks Value Style Score, indicating it is trading at par with its peers [15] - Valuation multiples such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) are essential for determining whether the stock is fairly valued, overvalued, or undervalued [13][14] Bottom Line - The Zacks Rank 3 suggests that Deckers may perform in line with the broader market in the near term, despite the market buzz surrounding the company [16]

Core Viewpoint - Deckers Outdoor will face challenges due to tariffs, but its flexible supply chain and strong brand presence may mitigate the impact on its financial performance [1] Group 1: Impact of Tariffs - The company will experience higher costs as a result of tariffs [1] - Tariffs are a significant topic in the market, affecting various companies including Deckers Outdoor [1] Group 2: Competitive Advantage - Deckers Outdoor's flexible supply chain may provide an advantage over competitors facing similar tariff-related challenges [1] - The strength of the company's brands could help maintain its market position despite increased costs [1]

Core Viewpoint - Deckers Outdoor has experienced significant stock volatility, with a notable decline of 53% from its 52-week high despite strong financial performance, raising concerns about trade tariffs impacting the company [1] Group 1: Company Performance - Deckers Outdoor is recognized for its footwear brands, particularly Ugg and Hoka, with Hoka projected to generate over $2 billion in sales this year, more than doubling its size in three years [3] - In fiscal Q3 2025, total net sales increased by 17.1% year over year, and earnings per share (EPS) rose by 19% to a record $3, with Hoka brand sales surging 24% [4] - Deckers is gaining market share as competitors like Nike face declining sales, supported by a solid balance sheet with $2.2 billion in cash and zero debt [5] Group 2: Trade Tariff Concerns - Deckers relies on overseas manufacturing in China and Vietnam, facing challenges from tariffs imposed by the Trump administration, including a 10% baseline tax and higher rates on imports from Vietnam and China [6] - There is potential for tariff relief as discussions between the U.S. and Vietnam leaders suggest a possible trade deal, which could significantly benefit Deckers since most of its footwear is sourced from Vietnam [7][8] Group 3: Valuation and Market Position - The decline in Deckers' stock price has led to concerns about profit margins and growth sustainability, but the stock is now trading at a forward price-to-earnings ratio of 16, presenting a bargain compared to peers like Nike and On Holding, which trade at 27 and 33 respectively [9][10][11] - The recent sell-off positions Deckers as a value pick in the industry, despite uncertainties regarding future earnings [10][11] Group 4: Investment Outlook - Deckers Outdoor is viewed as a compelling investment opportunity due to its brand momentum, strong growth, and attractive valuation, making it a potential buy-the-dip candidate for diversified portfolios [13]

Company Performance - Deckers (DECK) closed at $106.13, with a slight increase of +0.1% from the previous session, outperforming the S&P 500's loss of 0.23% [1] - Over the past month, Deckers' shares have declined by 16.34%, which is worse than the Retail-Wholesale sector's loss of 11.71% and the S&P 500's loss of 12.13% [1] Earnings Forecast - The upcoming earnings disclosure for Deckers is anticipated, with projected earnings per share (EPS) of $0.55, representing a 33.73% decrease from the same quarter last year [2] - Revenue is forecasted to be $992.79 million, indicating a growth of 3.44% compared to the same quarter of the previous year [2] Analyst Estimates - Recent adjustments to analyst estimates for Deckers are crucial as they reflect changing business trends, with positive revisions indicating a favorable outlook on the company's health and profitability [3] Zacks Rank and Valuation - Deckers currently holds a Zacks Rank of 2 (Buy), with a track record of superior performance, where 1 stocks have averaged an annual return of +25% since 1988 [5] - The Forward P/E ratio for Deckers is 16.07, which is a premium compared to the industry average of 12.51, and the PEG ratio stands at 1.06, compared to the industry average of 1.22 [6] Industry Context - The Retail - Apparel and Shoes industry, part of the Retail-Wholesale sector, has a Zacks Industry Rank of 168, placing it in the bottom 33% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Company Performance - Deckers Outdoor Corporation (DECK) has experienced a significant decline in its stock price, dropping 25.9% over the past month, which is worse than the Zacks Retail-Apparel and Shoes industry's decline of 7.9% and the S&P 500's decline of 3.3% [1][4] - The stock closed at $100.88, nearly 55% below its 52-week high of $223.98 reached on January 30, 2025, and is trading below its 50 and 200-day moving averages, indicating bearish sentiment [6][9] Revenue and Growth Challenges - The decline in DECK's stock price is attributed to slowing growth and increased competition in the footwear and accessories market, with revenue deceleration due to inventory constraints affecting key brands like UGG [4][13] - Management anticipates a 13.2% decline in UGG sales in the fourth quarter, contrasting with a 16.1% year-over-year growth in the third quarter, leading to an expected overall sales growth deceleration to 1% in the fourth quarter from 17.1% in the third quarter [14][16] Cost and Margin Pressures - SG&A expenses rose 24.9% year-over-year to $535.3 million in the fiscal third quarter, driven by increased marketing spend and an expanded workforce, which is expected to pressure the company's operating margin [17] - Increased markdowns and promotional activities, particularly for HOKA, along with higher freight costs and foreign exchange pressures, are anticipated to further impact profitability [16][17] Valuation Metrics - DECK is currently trading at a forward 12-month P/S ratio of 3.09, significantly higher than the industry average of 1.45 and the sector average of 1.50, indicating strong investor confidence but also heightening valuation risk [9][10] - Compared to peers, Boot Barn has a forward P/S of 1.56, Skechers at 0.73, and Adidas at 1.35, highlighting DECK's premium positioning [10] Long-term Growth Potential - Deckers is focusing on brand portfolio reinforcement through innovative product launches and optimized distribution strategies, with management guiding for a 15% year-over-year revenue growth to $4.9 billion for fiscal 2025 [18][19] - The company is expanding its international presence, particularly in high-potential markets like China, which is expected to contribute to long-term revenue growth [21] Direct-to-Consumer Segment - The direct-to-consumer (DTC) segment is a key growth driver, with DTC net sales increasing 17.9% to $1.01 billion in the fiscal third quarter, supported by strong digital performance and the expansion of flagship retail locations [22] - Enhanced omnichannel capabilities and loyalty initiatives are fueling customer acquisition and brand loyalty, positioning the company for sustained success [22]

Group 1: Market Overview - The S&P 500 index is down approximately 5% at the start of 2025, indicating investor concerns about the economy [1] - Stocks are experiencing a significant decline, reflecting broader economic worries [1] Group 2: Deckers Outdoor - Deckers Outdoor is the worst-performing stock on the S&P 500, down 46% [3] - The company reported a 17% revenue growth in Q4 2024, with net sales of $1.8 billion, but analysts were not satisfied with its guidance projecting 15% growth for the current year [3][4] - The stock was previously trading at over 35 times its trailing earnings but has since dropped to about 18 times [4] - Economic uncertainties, including trade wars and tariffs, pose risks to Deckers' business, and there is potential for guidance cuts [5] Group 3: Tesla - Tesla is the second worst-performing stock, down 38%, facing challenges due to questionable growth prospects and controversies surrounding CEO Elon Musk [6] - The company's automotive revenue fell by 8% in Q4, totaling $19.8 billion, with profits declining by 71% year over year to $2.3 billion [7] - Tesla's stock is trading at over 90 times its estimated future earnings, indicating it remains highly expensive with potential for further decline [8] Group 4: On Semiconductor - On Semiconductor is the third worst-performing stock, down 36%, primarily affected by economic headwinds in the automotive sector [9] - The company reported sales of $7.1 billion in 2024, a 14% decline year over year, suggesting a challenging recovery ahead [10] - On Semiconductor trades at a relatively modest valuation of 16 times next year's estimated earnings, presenting a potential long-term buying opportunity [10][11] - The long-term growth prospects for semiconductor companies are significant, with On Semiconductor's stock at multiyear lows, indicating potential for future recovery [11]

Company Overview - Deckers Outdoor Corporation, founded in 1973 and headquartered in Goleta, California, is a leading designer, producer, and brand manager of innovative footwear and accessories for outdoor sports and lifestyle activities [12] - The company markets products primarily under four proprietary brands: UGG, HOKA, Teva, and other brands, mainly Koolaburra [12] Investment Ratings - Deckers is currently rated as a 3 (Hold) on the Zacks Rank, with a VGM Score of A, indicating a solid overall performance [12] - The company is considered a top pick for growth investors due to its strong Growth Style Score of A, forecasting a year-over-year earnings growth of 21% for the current fiscal year [13] Earnings Estimates - In the last 60 days, three analysts have revised their earnings estimates higher for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.07 to $5.88 per share [13] - Deckers has an average earnings surprise of 36.8%, showcasing its ability to exceed earnings expectations [13]