Core Insights - Deckers Outdoor Corporation's performance is primarily driven by strong consumer demand for its flagship brands, HOKA and UGG, with year-over-year sales growth of 10% and 3.6% respectively in Q4 FY25 [1][9] Brand Performance - HOKA's sales reached $2.2 billion in FY25, reflecting a 23.6% year-over-year increase, supported by new product launches and international expansion, particularly in EMEA and China [4][2] - UGG generated $2.5 billion in sales for FY25, marking a 13.1% year-over-year growth, with a focus on expanding its product line beyond cold-weather offerings [4][3] International Growth - HOKA's international revenues grew by 39% year-over-year, now accounting for 34% of total brand sales, while UGG's international revenues increased by 20%, representing 39% of total sales [4][2] Competitive Landscape - Key competitors in brand innovation include Wolverine World Wide, Inc. and Urban Outfitters Inc., with Wolverine's Saucony and Merrell brands showing strong revenue growth [5][6] - Urban Outfitters' brand portfolio also demonstrated positive performance, with notable increases in net sales for its brands [7] Financial Performance and Valuation - Deckers' shares have declined by 50% year-to-date, compared to a 17.6% decline in the industry [8] - The company trades at a forward price-to-earnings ratio of 16.45X, slightly below the industry's average of 17.01X [10] - Zacks Consensus Estimate indicates a projected earnings decline of 4.4% for FY26, with a potential recovery of 9.1% in FY27 [11]

Core Viewpoint - Deckers Outdoor Corporation (DECK) has experienced a significant decline in stock price, dropping 49% over the past six months, which is substantially worse than the broader retail and market indices [1][4][9] Group 1: Stock Performance - DECK shares have underperformed compared to the Zacks Retail-Apparel and Shoes industry, which fell by 15.7%, and the Retail-Wholesale sector's decline of 3.4% [1][4] - The stock closed at $107.70, nearly 51.9% below its 52-week high of $223.98 reached on January 30, 2025, and is trading below its 50 and 200-day moving averages [6][9] - Compared to peers, Boot Barn's shares increased by 9.6%, while Adidas and Nike saw declines of 7.3% and 18.7%, respectively [5] Group 2: Growth Challenges - The decline in DECK's stock price is attributed to slowing growth and increased competition in the footwear and accessories market, alongside weaker direct-to-consumer (DTC) sales in the U.S. for HOKA [4][9] - Management anticipates up to $150 million in additional costs due to new tariffs, which will impact gross margins that reached a record 57.9% in fiscal 2025 but are expected to decline in fiscal 2026 [15][20] - The company has opted not to provide formal revenue or earnings guidance for fiscal 2026 due to uncertainties in global trade policies and consumer sentiment [19] Group 3: Strategic Initiatives - Deckers is focusing on sustainable growth through global expansion, innovation, and a balanced channel strategy, with HOKA and UGG deriving 34% and 39% of revenues from international markets in fiscal 2025 [21] - The company is investing in innovation, with five HOKA franchises generating over $100 million annually, and is adapting to consumer preferences through digital-first strategies [22] Group 4: Valuation Concerns - DECK is currently trading at a forward 12-month price-to-sales (P/S) ratio of 2.96, significantly higher than the industry average of 1.74 and the sector average of 1.61, raising concerns about its elevated valuation amid current challenges [10][11]

Core Insights - Deckers Outdoor Corporation's wholesale business significantly contributed to revenue growth in Q4 of fiscal 2025, with HOKA and UGG performing strongly [1][10] - Total revenues reached $1.02 billion in Q4, marking a 6% increase year over year, despite modest pressure on direct-to-consumer sales [3][10] Wholesale Performance - Wholesale revenues increased by 12.3% year over year to $611.6 million, showcasing the channel's strength in generating incremental sales [1][10] - HOKA's growth was driven by an expanded retail presence and the successful launch of the Bondi 9, while UGG's gains were attributed to strong demand for seasonal products [2][10] Strategic Initiatives - U.S. wholesale efforts included a pilot program with Journeys aimed at attracting younger consumers, while international growth was supported by partnerships with Intersport, Sport Check, and the JD Group [4] - Deckers aims for a balanced 50-50 split between wholesale and direct-to-consumer sales, with expectations for wholesale to continue outpacing DTC in fiscal 2026 [5][10] Competitive Landscape - Key competitors in the wholesale channel include Steven Madden, Ltd. and Urban Outfitters Inc., both of which reported revenue growth in their respective wholesale segments [6][8] - Steven Madden's wholesale channel generated $439.3 million in Q1 2025, while Urban Outfitters achieved a 24% revenue increase in its wholesale channel for Q1 fiscal 2026 [7][8] Financial Metrics - Deckers shares have declined by 45.4% year to date, compared to a 13.1% decline in the industry [9] - The company trades at a forward price-to-earnings ratio of 17.82X, slightly above the industry average of 17.77X [12]

Company Performance - Deckers (DECK) closed at $110.91, reflecting a +1.55% change from the previous day, outperforming the S&P 500's daily gain of 0.09% [1] - Over the past month, Deckers' shares declined by 9.79%, underperforming the Retail-Wholesale sector's gain of 6.31% and the S&P 500's gain of 7.21% [1] Upcoming Earnings - Deckers is expected to report earnings of $0.67 per share, indicating a year-over-year decline of 10.67%, while revenue is projected to be $899.01 million, representing an 8.92% increase compared to the same quarter last year [2] - For the full year, earnings are projected at $6.12 per share and revenue at $5.36 billion, showing changes of -3.32% and +7.61% respectively from the previous year [3] Analyst Estimates and Valuation - The Zacks Consensus EPS estimate has decreased by 5.3% over the past month, and Deckers currently holds a Zacks Rank of 4 (Sell) [5] - Deckers has a Forward P/E ratio of 17.86, which is a premium compared to the industry's average Forward P/E of 17 [5] - The company has a PEG ratio of 6.57, significantly higher than the Retail - Apparel and Shoes industry's average PEG ratio of 1.94 [6] Industry Context - The Retail - Apparel and Shoes industry ranks in the bottom 30% of all industries, with a current Zacks Industry Rank of 173 [6] - The Zacks Industry Rank measures the strength of industry groups, indicating that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Insights - Deckers Outdoor Corporation's international expansion strategy is a significant driver of growth, with HOKA and UGG brands contributing notably to this momentum [2][12] - In fiscal 2025, international sales increased by 19.9% year over year, reaching $374.1 million, underscoring the importance of global markets [2][12] International Sales Performance - HOKA's international revenues grew by 39% year over year, now making up 34% of total sales, up from 30% in fiscal 2024 [3] - UGG's international revenues rose by 20% year over year, accounting for 39% of total UGG sales, an increase from 37% in the previous fiscal year [3] Strategic Initiatives - Deckers expanded its presence in key regions such as Europe, the Middle East and Africa (EMEA), and China, including the opening of HOKA's Shanghai Experience Center [4] - In Europe, HOKA gained significant shelf space and recognition in markets like the U.K., Germany, France, and Italy, while in China, the brand enhanced digital engagement and visibility through sponsorships [5] Future Growth Plans - The company aims to increase its international revenue mix to 50% of total sales in the coming years, reducing reliance on the North American market [6] - Management anticipates that international growth will continue to outpace growth in the U.S. market [6] Competitive Landscape - Key competitors in the international market include Wolverine World Wide and Skechers U.S.A., with Wolverine reporting a 16.4% year-over-year sales increase in Q1 2025 [7][8] - Skechers' international sales now represent 65% of its total business, with EMEA sales growing by 14% [9] Financial Performance and Valuation - Deckers' shares have declined by 47.9% year to date, compared to the industry's decline of 13.7% [10] - The company trades at a forward price-to-earnings ratio of 17.02X, slightly below the industry average of 17.72X [13] - The Zacks Consensus Estimate for fiscal 2026 earnings implies a year-over-year decline of 3.3%, while fiscal 2027 estimates suggest a 9.1% increase [14]

Group 1 - Deckers Outdoor (NYSE: DECK) is known for its brands such as HOKA and UGG and has experienced impressive growth, with stock trading at record highs in 2025 [1] - However, a series of external events have negatively impacted the company's momentum, leading to a decline in share price since January [1] Group 2 - The company is characterized by growth in revenue, earnings, and free cash flow, which are key investment criteria [1] - Deckers Outdoor is recognized for having excellent growth prospects and favorable valuations [1] - The company is preferred for its steady growth, high free cash flow margins, dividend stocks, and generous share repurchase programs [1]

Core Viewpoint - Companies with strong balance sheets are increasingly engaging in stock buybacks as a shareholder-friendly strategy amid market volatility and sector rotations in 2025, indicating management's confidence in their businesses and the undervaluation of their stocks [1] Group 1: Stock Buyback Announcements - Multiple large-cap stocks have announced significant buyback programs, with one consumer discretionary company having buyback capacity equal to nearly 16% of its market cap, reflecting high confidence in future performance [2] - Lennox International announced an increase in its buyback capacity to $1 billion, totaling just under $1.3 billion, which is about 6.4% of its market capitalization [3] - Deckers Outdoor increased its buyback authorization to approximately $2.5 billion, equating to 15.8% of its market capitalization, indicating a strong ability to reduce outstanding shares [7] Group 2: Financial Performance and Metrics - Lennox International's operating margin expanded from around 14% in 2022 to nearly 19.5% in 2024, with full-year adjusted EPS growing by 54% [4][5] - Deckers Outdoor's stock gained approximately 265% from early 2022 to January 2025 but has since fallen about 53%, prompting the recent buyback authorization [6][8] - Tenaris approved a new share repurchase program valued at $1.2 billion, which is approximately 6.7% of its market capitalization, and has a strong dividend yield of just under 5% [11][12] Group 3: Cash Reserves and Future Buyback Capacity - Deckers Outdoor has a cash balance of just under $1.9 billion and only $277 million in debt, providing a strong ability to execute its buyback plans [9] - Tenaris ended the last quarter with a net cash balance of $4 billion and generated free cash flow of over $2.1 billion in the last 12 months, allowing it to potentially execute its full buyback capacity without reducing cash reserves [13]

Company Performance - Deckers (DECK) closed at $105.52, down 1.63% from the previous trading session, underperforming the S&P 500 which lost 0.01% [1] - Over the past month, Deckers shares have decreased by 3.47%, lagging behind the Retail-Wholesale sector's gain of 5.26% and the S&P 500's gain of 6.43% [1] Earnings Expectations - The upcoming earnings report is expected to show an EPS of $0.69, reflecting an 8% decline compared to the same quarter last year [2] - Revenue is anticipated to be $899.01 million, indicating an 8.92% increase from the same quarter last year [2] Full Year Estimates - For the full year, analysts expect earnings of $6.12 per share and revenue of $5.37 billion, representing changes of -3.32% and +7.64% respectively from the previous year [3] - Recent changes in analyst estimates suggest optimism about the company's business and profitability [3] Valuation Metrics - Deckers has a Forward P/E ratio of 17.54, which is higher than the industry average of 17.05 [5] - The company has a PEG ratio of 6.45, significantly above the Retail - Apparel and Shoes industry average PEG ratio of 1.93 [6] Industry Ranking - The Retail - Apparel and Shoes industry is ranked 169 in the Zacks Industry Rank, placing it in the bottom 32% of over 250 industries [7] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Viewpoint - Deckers Outdoor has experienced significant stock losses in 2025, with a nearly 50% decline year-to-date, contrasting with slight gains in the S&P 500, yet the company's fundamentals remain strong, making it appealing for long-term investors [1][8] Financial Performance - Deckers reported mixed fiscal Q4 results, surpassing earnings expectations with Q4 revenue climbing 6.5% to over $1 billion and EPS rising to $1.00 from $0.82, driven by strong brand performance from HOKA and UGG [2] - HOKA saw a 10% increase in Q4 and 23.6% for the total year, while UGG rose by 3.6% and 13.1%, respectively [2] - Management anticipates Q1 sales between $890–$910 million, representing an 8%–10% year-over-year increase [2] Valuation and Fundamentals - DECK is currently trading at a price-to-earnings ratio of about 17x, down from over 32 at the close of 2024, significantly below the S&P 500's current P/E of 26 [3] - The company generates over $1 billion in annual cash flow with a market capitalization of $16 billion, equating to a 6% cash yield, alongside a 16% revenue growth in the past year [4] Growth and Profitability - Revenue has surged at an impressive annual rate of 16.4% over the last three years, more than triple the pace of the S&P 500, with operating margins at 24.9% and net income margins at 19.4% [5] Financial Strength - Deckers has a solid balance sheet with only $276 million in debt and $2.2 billion in cash, resulting in a debt-to-equity ratio of 1.3%, significantly lower than the average S&P 500 company [6] Downturn Resilience - Historically, Deckers has experienced sharper declines than the S&P 500 during market downturns but has shown robust recovery potential, rebounding significantly after past crises [7] Overall Assessment - Deckers is characterized as a high-quality growth company facing temporary challenges, with strong fundamentals, robust brands, a healthy balance sheet, and attractive valuation [8][10]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][10] Core Insights - The DTC channel is under short-term pressure, and the FY2026 Q1 guidance is below expectations [2][6] - The company reported FY2025 revenue of $4.986 billion, a year-on-year increase of 16.3%, with a gross margin of 57.9% [6][9] - The management expects double-digit revenue growth for FY2026, with HOKA brand growth around 15% and UGG brand growth in the single digits [9] Financial Performance - FY2025 Q4 revenue was $1.022 billion, exceeding market expectations of $1.001 billion, with a year-on-year growth of 6.5% [6] - The gross margin for FY2025 Q4 was 56.7%, up 0.5 percentage points year-on-year, driven by an increase in full-price sales of UGG [6] - The company’s inventory at the end of the quarter was $495.2 million, a year-on-year increase of 4.4% [6] Regional and Channel Performance - In FY2025 Q4, UGG brand revenue was $2.531 billion, a year-on-year increase of 13.1% [6] - DTC channel revenue for FY2025 Q4 was $410 million, a year-on-year decrease of 1.2% [6] - HOKA brand revenue for FY2025 was $2.233 billion, a year-on-year increase of 23.6%, with DTC revenue growth of 23% [6] Future Projections - Revenue projections for FY2026 are estimated at $5.412 billion, with a growth rate of 8.6% [8] - The expected diluted EPS for FY2026 is $6.70, with a projected P/E ratio of 15.6 [8][9] - The company aims to maintain profitability through selective price increases and optimizing production efficiency [9]