Core Viewpoint - Deckers Outdoor (DECK) is identified as a potential investment opportunity due to its current trading discount and strong growth prospects despite recent stock price declines [2][3]. Financial Performance - Deckers' stock has fallen 46% from its peak earlier this year, primarily due to concerns over tariffs and slowing growth, which are now considered overblown following better-than-expected first-quarter earnings [3][12]. - The stock trades at a price-to-earnings ratio of 19, significantly lower than the S&P 500's P/E of 27, indicating an attractive valuation [5]. - Revenue for Deckers rose 16.9% to $964.5 million, surpassing estimates of $900.4 million [5]. - Hoka sales increased by 19.8% to $653.1 million, while Ugg sales rose by 18.9% to $265.1 million [6]. Market Dynamics - Domestic sales decreased by 2.8% to $501.3 million, but international sales surged by 49.7% to $463.3 million, highlighting the company's successful expansion into new markets [7]. - Growth in international markets was particularly driven by Europe and China, as Deckers expands its distribution in Europe [7]. Future Outlook - Management anticipates continued solid growth for its core brands, projecting mid-teens growth for Hoka and mid-single-digit growth for Ugg for the remainder of the year [8]. - Deckers has a strong historical performance, with stock appreciation of over 1,000% in the last decade, despite recent declines [9]. Brand Strength - Deckers has successfully developed its brands, particularly Hoka, which is gaining market share due to its popularity among runners and professionals [11]. - The company has a strong track record of acquiring and growing brands, having transformed both Ugg and Hoka into multibillion-dollar entities [10]. Cost Considerations - Deckers expects a $185 million impact on the cost of goods sold due to tariffs, but this is not seen as a justification for the significant market cap loss of approximately $15 billion [12].

Fuzzy Ugg boots and chunky Hoka running shoes saw big sales gains last quarter, bolstering financial results for parent company Deckers https://t.co/dzNRgDrcEY ...

Company Overview - Deckers Outdoor, known for Hoka running shoes and Ugg boots, has seen its stock decline by 49.5% year-to-date as of June 17 [2][5] - Despite recent struggles, Deckers has historically been one of the best-performing stocks, with returns exceeding 10,000% at one point [2] Recent Performance - In the fiscal fourth quarter ending March 31, Deckers' revenue grew by only 6.5%, a significant drop from nearly 20% growth in the first three quarters [5] - Hoka's growth slowed from nearly 30% in the first three quarters to just 10% in the fourth quarter, indicating potential market share loss to competitors like Nike [5] - Ugg, Deckers' largest brand, experienced a growth rate of just 3.6% in the fourth quarter compared to 13% for the full year [5] Guidance and Expectations - The company did not provide full-year guidance due to macroeconomic uncertainties related to tariffs, projecting first-quarter revenue between $890 million and $910 million, representing 9% growth at the midpoint [6] - Earnings per share are expected to decline from $0.75 to a range of $0.62 to $0.67 [6] - Deckers anticipates a gross margin decline of 250 basis points due to increased freight costs, promotional activities, and a shift in sales channels [7] Investment Opportunity - The significant stock sell-off may present a buying opportunity, as the challenges faced by Deckers are viewed as mostly temporary [8] - With the share price halved, Deckers trades at an attractive price-to-earnings ratio of 16, which is a substantial discount compared to the S&P 500 [9] - The company has initiated a stock buyback program, increasing its repurchase authorization to $2.5 billion, representing 16% of its market cap [9] Financial Position - Deckers has a strong financial position with no debt, $1.9 billion in cash, and a favorable assets-to-liabilities ratio of 3.5 [10] - The long-term outlook remains positive as Hoka and Ugg have established differentiated brands with a history of growth [10] Future Growth Potential - Even modest profit growth could lead to significant stock appreciation, as tariff-related challenges are expected to diminish over time [11]