Core Viewpoint - Deckers Outdoor Corporation's shares are experiencing a significant decline of over 18% despite reporting strong earnings and sales figures, raising questions about market reactions and potential concerns regarding inventory levels [1][2]. Financial Performance - Deckers reported third-quarter sales of $1.83 billion, surpassing analyst expectations of $1.73 billion [1]. - Earnings per share were $3, exceeding the anticipated $2.56 [2]. - The company revised its full-year earnings forecast to a range of $5.75 to $5.80, up from the previous outlook of $5.15 to $5.25 [2]. Inventory Concerns - The company's inventory increased from $474.31 million to $576.67 million, marking a growth of over 20% [2]. - Rising inventory levels can indicate potential issues for retailers, as unsold products may lead to price reductions or writedowns, which could signal bearish trends for the long term [3]. Technical Analysis - A support level for Deckers' shares is identified around $182.25, which has previously acted as a resistance point [1][4]. - If the stock price approaches this support level, it may attract buyers who previously sold at higher prices, potentially leading to a reversal and upward trend [6].

Core Viewpoint - Deckers Outdoor Corporation reported strong quarterly earnings, exceeding analyst expectations, but shares are trading lower due to concerns over future sales and inventory management [1][5]. Financial Performance - Quarterly earnings were $3 per share, surpassing the consensus estimate of $2.55 [1]. - Quarterly revenue reached $1.83 billion, beating the analyst consensus of $1.73 billion and increasing from $1.56 billion in the same period last year [1]. - For fiscal 2025, revenue growth is projected at 15%, with earnings expected between $5.75 and $5.80 per share [1]. Analyst Insights - Telsey Advisory Group noted strong results amid a challenging macro environment and praised the company's inventory management strategy [2]. - Piper Sandler indicated a potential slowdown in fourth-quarter sales and lower gross margins due to increased markdowns on UGG products [3]. - Truist Securities highlighted that the quarterly slowdown is attributed to inventory management and UGG shortages, but remains optimistic about growth [5]. - Needham emphasized Deckers as a high-quality company with strong brands and a solid management team, suggesting a favorable outlook for the next quarters [6]. - Stifel expressed concerns that HOKA growth projections for FY26 may be overly optimistic, despite confidence in the company's execution [7]. Price Forecasts and Ratings - Telsey Advisory Group maintained an Outperform rating with a price target of $240 [8]. - Piper Sandler reiterated a Neutral rating with a price target of $210 [8]. - Truist Securities maintained a Buy rating but lowered the price target to $225 from $235 [8]. - Needham reiterated a Buy rating with a price target of $246 [8]. - Stifel maintained a Hold rating, raising the price target to $185 from $181 [8]. - Guggenheim raised the gross margin estimate for FY25 to 57.2% from 55.5% [9]. Market Reaction - Deckers shares are trading lower by 18.8%, currently at $181.12 [9].

Core Insights - Deckers Outdoor Corporation (DECK) reported strong third-quarter results, exceeding expectations and raising its fiscal 2025 outlook, driven by the performance of HOKA and UGG brands [1][2] Financial Performance - Quarterly earnings reached $3.00 per share, surpassing the Zacks Consensus Estimate of $2.60 and up from $2.52 in the prior year [3] - Net sales increased 17.1% year over year to $1,827.2 million, exceeding the consensus estimate of $1,713 million; on a constant-currency basis, net sales grew 16.6% [4] - Gross margin expanded to 60.3% from 58.7% in the previous year, surpassing expectations of 55.5%, driven by higher-margin UGG products and increased full-price sales [5] - SG&A expenses rose 24.9% year over year to $535.3 million, representing 29.3% of net sales, an increase of 180 basis points from last year [6] - Operating income was $567.3 million, up from $487.9 million in the prior year, with an operating margin of 31% [6] Brand Performance - HOKA brand sales increased 23.7% year over year to $530.9 million, exceeding projections [7] - UGG brand net sales grew 16.1% to $1,244 million, surpassing estimates [7] - Teva brand sales declined 6% to $24.1 million, falling short of expectations [7] - Other brands, primarily Koolaburra, saw a 16.6% decline in net sales to $28 million [8] Sales Channels and Geography - Wholesale net sales increased 16.2% year over year to $815.8 million [9] - Direct-to-consumer (DTC) net sales advanced 17.9% to $1,011 million, with DTC comparable net sales surging 18.3% [9] - Domestic net sales rose 11.5% to $1,169 million, while international net sales increased 28.5% to $657.9 million [9] Future Outlook - The company anticipates a 15% increase in fiscal 2025 net sales, reaching $4.9 billion, with HOKA expected to grow by 24% and UGG by 10% [11] - Fiscal 2025 gross margin is projected to be at or slightly better than 57%, up from earlier estimates [11] - SG&A expenses as a percentage of net sales are expected to be 35%, indicating a deleverage of 100 basis points from last year [12] - The operating margin is projected to be approximately 22%, an increase from previous guidance [12] - Fiscal 2025 earnings are forecasted in the range of $5.75-$5.80 per share, up from $4.86 reported last year [13]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 increased by 17% year-over-year to $1.83 billion, with gross margins improving to 60.3% [11][35][38] - Diluted earnings per share rose by 19% to $3, compared to $2.52 in the previous year [11][40] - Fiscal year-to-date performance shows significant revenue growth, with HOKA increasing by 29% and UGG growing by 15% [13][36] Business Line Data and Key Metrics Changes - UGG's global revenue in Q3 increased by 16% to $1.24 billion, with balanced growth across direct-to-consumer and wholesale channels [15][36] - HOKA's global revenue rose by 24% to $531 million, with DTC increasing by 27% and wholesale growing by 21% [26][36] - UGG experienced strong growth in both acquisition and retention of customers, with a 25% increase in UGG Reward members [16] Market Data and Key Metrics Changes - International markets for UGG rose by 28%, while the DTC and wholesale channels saw a balance increase of 19% [13] - HOKA's growth was particularly strong in the APAC region, with China contributing the largest incremental dollar revenue [26] Company Strategy and Development Direction - The company plans to phase out the Koolaburra brand to focus on more significant organic opportunities [24] - The strategy for HOKA includes building awareness and consideration while managing the marketplace for long-term growth [59][60] - The company aims to maintain a flexible operating model to support long-term brand health and profitability [34][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 15% revenue growth for fiscal 2025, marking the fifth consecutive year of mid-teens growth [14][42] - The company anticipates challenges in Q4 due to inventory limitations and a more promotional environment compared to the previous year [44][49] - Management remains committed to maintaining financial discipline and delivering top-tier profitability [52][50] Other Important Information - The company repurchased approximately $45 million worth of shares during the third quarter [41] - The updated guidance for diluted earnings per share is now in the range of $5.75 to $5.80 [48] Q&A Session Summary Question: Can you discuss the management of the HOKA brand and growth expectations? - Management emphasized the importance of building HOKA as a transformational brand with a focus on long-term sustainable growth, not just chasing numbers [59][63] Question: What is the reception of upcoming product launches like Clifton 10 and Arahi 8? - The reception has been positive, with both models booked well and meeting expectations [68][70] Question: How did the U.S. growth compare to expectations and what are the international growth prospects? - U.S. growth met expectations, and international growth is expected to outpace the U.S. in the future [86][90] Question: What are the opportunities to maintain or improve operating margins? - Management acknowledged that while maintaining high margins is challenging, the scarcity model and brand strength support margin levels [91][92] Question: Can you elaborate on the Clifton 10 launch and its impact on sales and margins? - The Clifton 10 will have a staggered launch, with some sales recognized in Q4 and some in Q1, and margin impacts from the closeout of Clifton 9 are anticipated [140][141]

Core Insights - Deckers (DECK) reported revenue of $1.83 billion for the quarter ended December 2024, marking a year-over-year increase of 17.1% and exceeding the Zacks Consensus Estimate of $1.71 billion by 6.70% [1] - The company's EPS for the same period was $3.00, up from $2.52 a year ago, surpassing the consensus EPS estimate of $2.60 by 15.38% [1] Financial Performance - International net sales reached $657.90 million, exceeding the average estimate of $543.46 million by two analysts, representing a year-over-year increase of 28.5% [4] - Domestic net sales totaled $1.17 billion, surpassing the average estimate of $1.11 billion, with a year-over-year change of 11.6% [4] - HOKA brand net sales amounted to $530.90 million, exceeding the average estimate of $516.30 million, reflecting a year-over-year increase of 23.7% [4] - UGG brand net sales were reported at $1.24 billion, above the average estimate of $1.13 billion, indicating a 16% year-over-year increase [4] - Other brands generated net sales of $28 million, slightly below the average estimate of $29.80 million, showing a year-over-year decline of 5.4% [4] - Teva brands reported net sales of $24.10 million, which was below the average estimate of $24.89 million, reflecting a year-over-year decrease of 5.9% [4] Market Performance - Deckers shares have returned +7.8% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

Group 1: Earnings Performance - Deckers reported quarterly earnings of $3 per share, exceeding the Zacks Consensus Estimate of $2.60 per share, and up from $2.52 per share a year ago, representing an earnings surprise of 15.38% [1] - The company posted revenues of $1.83 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 6.70%, compared to year-ago revenues of $1.56 billion [2] - Deckers has surpassed consensus EPS estimates for four consecutive quarters [2] Group 2: Stock Performance and Outlook - Deckers shares have increased approximately 7.8% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is $0.71 on revenues of $1.05 billion, and for the current fiscal year, it is $5.62 on revenues of $4.9 billion [7] Group 3: Industry Context - The Retail - Apparel and Shoes industry, to which Deckers belongs, is currently ranked in the top 24% of over 250 Zacks industries, indicating a favorable outlook for stocks in this sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that investors can benefit from tracking these revisions [5][6]

Financial Performance - Revenue for the quarter increased by 15% compared to the same period last year [1]. - Net profit margin improved to 12%, up from 10% in the previous quarter [2]. - Operating expenses rose by 8% due to increased marketing and R&D investments [3]. Market Expansion - The company successfully entered two new international markets, contributing to a 20% increase in global sales [4]. - A new distribution partnership was established in Europe, expected to boost market share by 5% in the next fiscal year [5]. Product Development - Launched three new products, which accounted for 25% of total sales this quarter [6]. - R&D expenditure increased by 10% to support ongoing innovation and product enhancements [7]. Operational Efficiency - Implemented new cost-saving measures that reduced production costs by 5% [8]. - Streamlined supply chain operations, resulting in a 15% reduction in delivery times [9]. Customer Engagement - Customer satisfaction scores improved by 10% due to enhanced service and support initiatives [10]. - Launched a new loyalty program, which has already attracted 50,000 new members [11]. Strategic Partnerships - Formed a strategic alliance with a leading tech company to co-develop next-generation products [12]. - Signed a long-term agreement with a major supplier to secure better pricing and ensure supply chain stability [13]. Regulatory Compliance - Successfully passed all regulatory audits with no major findings [14]. - Invested in new compliance training programs for employees to ensure adherence to industry standards [15]. Sustainability Initiatives - Reduced carbon emissions by 12% through the implementation of green manufacturing practices [16]. - Committed to achieving net-zero emissions by 2030, with a detailed roadmap in place [17]. Employee Development - Increased employee training hours by 20% to enhance skills and productivity [18]. - Introduced a new performance-based incentive program to motivate and retain top talent [19]. Technology Investments - Allocated $50 million to upgrade IT infrastructure, improving system reliability and security [20]. - Adopted advanced data analytics tools to enhance decision-making and operational insights [21]. Risk Management - Established a new risk management framework to better identify and mitigate potential threats [22]. - Conducted regular stress tests to ensure financial resilience in volatile market conditions [23]. Shareholder Value - Increased dividend payouts by 10%, reflecting strong financial performance and confidence in future growth [24]. - Repurchased 2 million shares as part of the ongoing share buyback program [25].

Core Viewpoint - Deckers Outdoor Corporation is set to announce its third-quarter fiscal 2025 earnings results, with investors focused on the company's performance amid market challenges and opportunities [1]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for Deckers' revenues is $1.70 billion, reflecting a 9.1% increase from the previous year [2]. - The earnings per share (EPS) estimate has risen to $2.56, indicating a 1.6% growth year-over-year [3]. Key Growth Drivers - Deckers is focusing on innovation and expanding brand reach, particularly through product development for its HOKA and UGG brands [5]. - Sales for UGG are expected to grow by 1%, while HOKA is projected to see a significant increase of 19.7% year-over-year [6]. - The company is enhancing its direct-to-consumer channels, anticipating a 7% increase in direct-to-consumer revenues [7]. - International market expansion is a crucial part of Deckers' growth strategy, helping to increase market share and brand recognition [8]. Margin Pressures - Anticipated margin compression is expected due to rising costs, particularly in freight and a shift towards a normalized promotional environment, with gross margin expected to shrink by 320 basis points [9]. - SG&A expenses are projected to increase as a percentage of net sales, leading to an operating margin contraction of 480 basis points [9]. Earnings Prediction - The model predicts an earnings beat for Deckers, supported by a positive Earnings ESP of +6.84% and a Zacks Rank of 1 (Strong Buy) [10][11].

Company Overview - Deckers Outdoor (DECK) is a leading designer, producer, and brand manager of innovative footwear and accessories for outdoor sports and lifestyle activities [1] - The stock has a Zacks Rank 1 (Strong Buy), with increasing EPS expectations over recent months [1][2] Industry Position - Deckers Outdoor is part of the Zacks Retail – Apparel & Shoes industry, which ranks in the top 27% of all Zacks industries [2] Financial Performance - The company has exceeded the Zacks Consensus EPS estimate by an average of 40% across its last four quarterly releases [3] - In the latest financial report, EPS increased by 40% year-over-year, and sales grew by 20% [3] - Following the latest release, Deckers Outdoor raised its FY25 sales outlook [3] Brand Performance - The HOKA and UGG brands are experiencing strong consumer demand, regularly exceeding consensus expectations [4][6] - The company has seen margin expansion throughout the period, continuing a trend from recent periods [9]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1][2]. Company Overview: Deckers (DECK) - Deckers currently holds a Momentum Style Score of B and a Zacks Rank of 1 (Strong Buy), indicating strong potential for outperformance in the market [3][4]. - The stock has shown significant price appreciation, with a 26.78% increase over the past quarter and a 71.79% increase over the last year, compared to the S&P 500's 4.32% and 27.01% respectively [7]. Price Performance - Over the past week, Deckers shares increased by 1.16%, while the Zacks Retail - Apparel and Shoes industry remained flat. The monthly price change for Deckers is 3.32%, outperforming the industry's 1.03% [6]. - The average 20-day trading volume for Deckers is 1,287,021 shares, which is a bullish indicator when combined with rising stock prices [8]. Earnings Outlook - In the last two months, three earnings estimates for Deckers have been revised upwards, raising the consensus estimate from $5.48 to $5.56. For the next fiscal year, three estimates have also moved higher without any downward revisions [10]. Conclusion - Considering the positive momentum indicators and earnings outlook, Deckers is positioned as a strong buy candidate for investors seeking short-term gains [12].