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This Stock-Split Stock Is Beating Nike at Its Own Game
DECKDeckers(DECK) The Motley Fool·2024-10-12 09:47

Core Insights - Long-term shareholders of Decker Brands have seen significant returns, with the stock posting a total return of 1,000% over the last 10 years, while Nike's stock is up only about 100% [2][7] Company Performance - Decker Brands reported a revenue growth of 22% year over year to 825millioninthelastquarter,drivenprimarilybyitsHokabrand,whichsawa29825 million in the last quarter, driven primarily by its Hoka brand, which saw a 29% increase in revenue to 545 million [4] - In contrast, Nike experienced a 10% decline in revenue year over year, generating over 11billioninsaleslastquarter[4]DeckerBrandshasanoperatingmarginof22.311 billion in sales last quarter [4] - Decker Brands has an operating margin of 22.3%, significantly higher than Nike's 11.8%, indicating better profitability [5] Competitive Landscape - Decker Brands has successfully captured market share in the running shoe segment, directly competing with Nike through its Hoka brand, which appeals to environmentally conscious consumers [3] - The company has a strong track record of acquiring and growing multiple footwear brands, including Ugg, Teva, and Hoka, all of which have expanded significantly since their acquisition [6][7] Market Valuation - Decker Brands currently has a market capitalization of 24.6 billion and trades at a forward price-to-earnings (P/E) ratio of 30.4, which is considered high compared to the S&P 500's P/E of 30 [8] - Despite its growth, the high valuation may deter potential investors, as the sustainability of sales growth for its brands is uncertain [9]