Core Insights - Investors are encouraged to consider stocks like Deckers Outdoor, O'Reilly Automotive, and Lululemon Athletica due to their high return on invested capital (ROIC) in the competitive retail sector [1][3] Group 1: Return on Invested Capital (ROIC) - ROIC is a critical metric in the retail sector, indicating how much operating profit a company generates from every dollar invested [2] - The median ROIC for retail stocks tracked by Citi Research is 17.6%, with Deckers leading at 53%, followed by O'Reilly Automotive at 45% and Lululemon at 45% [3] Group 2: Stock Performance and Market Trends - Shares of Lululemon and Deckers have underperformed the broader market in 2025, both down approximately 50% year-to-date, while the S&P 500 has increased around 14% [4] - Analysts predict a flat profit year for Deckers ending March 2026, but expect around 10% growth in the following fiscal year, with a 25% upside implied by average sell-side analyst price targets [5] Group 3: Brand Performance - Hoka, a brand under Deckers, is noted as one of the fastest-growing in the athletic space, although there are concerns about potential growth slowdown in fiscal year 2026 [6] - O'Reilly Automotive is experiencing significant success, with shares up over 32% due to delayed new car purchases, benefiting from its efficient supply chain despite its stock being valued at nearly 33 times forward earnings, the highest in a decade [7]

Industry Overview - The Retail - Apparel and Shoes industry shows resilience amid macroeconomic challenges, driven by evolving consumer preferences and strong brand adaptability [1] - Key factors influencing the industry include fashion trends, consumer spending habits, economic dynamics, and seasonal variations [3] - The industry faces opportunities and challenges, requiring continuous product innovation and effective marketing while contending with fierce competition and price sensitivity [3] Key Trends - Consumer spending remains strong, with U.S. retail sales increasing by 0.6% in August, and clothing store sales rising by 1% month-over-month [4] - The Federal Reserve's interest rate cuts have lowered borrowing costs, enhancing consumer flexibility for discretionary spending [4] - Retailers are expected to see increased demand during the holiday season, creating opportunities for stronger sales and revenue growth [4] Company Highlights - Deckers Outdoor Corporation, Boot Barn Holdings, Zumiez Inc., and Genesco Inc. are identified as attractive investment opportunities due to their disciplined execution and digital strength [2] - Genesco is experiencing growth driven by a refreshed product mix and strategic investments, with a projected sales growth of 3.7% and EPS growth of 71.3% [17][18] - Zumiez shows resilience with consistent comparable sales growth and a projected sales growth of 3.4% and EPS growth of 566.7% [21][22] - Boot Barn is expanding its store base and leveraging AI-powered retail innovation, with projected sales growth of 13.3% and EPS growth of 12.2% [25][26] - Deckers is performing well with its brands HOKA and UGG, projecting a sales growth of 9% [29][31] Financial Performance - The Zacks Retail - Apparel and Shoes industry ranks 80, placing it in the top 33% of over 250 Zacks industries, indicating positive near-term prospects [8][9] - The industry has underperformed the broader Zacks Retail-Wholesale sector and the S&P 500 over the past year, declining by 2.9% compared to the S&P 500's growth of 18.9% [11] - The industry is currently trading at a forward P/E of 17.9X, lower than the S&P 500's 23.36X and the sector's 24.82X [14]

Deckers (DECK) has been beaten down lately with too much selling pressure. While the stock has lost 13.7% over the past four weeks, there is light at the end of the tunnel as it is now in oversold territory and Wall Street analysts expect the company to report better earnings than they predicted earlier.We use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is a momentum oscillator that measures the speed and change of price m ...

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]