Deckers Outdoor Corporation DECK has demonstrated strong upward momentum, trading above its 200 and 50-day simple moving averages (SMA). SMA is a key indicator of price stability and long-term bullish trends.
DECK ended yesterday’s trading session at $176.36, above its 200 and 50-day SMA of $154.65 and $162.56, respectively, highlighting a continued uptrend. This technical strength, along with sustained momentum, reflects positive market sentiment and investors’ confidence in Deckers’ financial health and growth prospects.
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Shares of this leading designer and producer of innovative, niche footwear and accessories are 4.4% below its 52-week high of $184.48 attained on June 3, 2024, making investors contemplate their next moves. In the past year, DECK stock has rallied 66.1%, comfortably outpacing the Zacks Retail-Apparel and Shoes industry’s modest 16.8% growth.
The company’s commitment to innovation in product development and a strong focus on international market expansion has enabled it to outperform both the broader Retail-Wholesale sector and the S&P 500 index, which grew 31.2% and 30.1%, respectively, during the same period.
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DECK Driving Growth With Product Innovation, DTC Success
Deckers’ ability to deliver consistent growth across both its direct-to-consumer (DTC) and wholesale channels, alongside successful international expansion, has reinforced its position for long-term success. Despite ongoing macroeconomic challenges, the company’s strategic marketplace management, product innovation, and consumer engagement initiatives have continued to drive brand strength and financial resilience.
The company is advancing HOKA toward becoming a multibillion-dollar brand while solidifying UGG's position as a global lifestyle brand. In the second quarter of fiscal 2025, HOKA and UGG posted impressive sales growth of 34.7% and 13%, respectively. This momentum, coupled with an expanded product assortment and optimized distribution channels, underpins Deckers' growth trajectory.
A standout driver of Deckers' success is its robust direct-to-consumer (DTC) business, which achieved a 19.9% increase in net sales to $397.7 million, along with 17% growth in comparable net sales during the quarter. By enhancing digital capabilities and strengthening its omnichannel presence, Deckers ensures seamless customer experiences and greater brand accessibility. The company’s strategic focus on consumer engagement through targeted marketing, collaborations, and seasonal product innovations continues to boost brand loyalty and fuel sales growth.
International expansion has been another critical factor in Deckers' growth, with international sales surging 33% year over year in the second quarter. The success of both UGG and HOKA in global markets, driven by targeted investments in new stores and retail locations, underscores the company’s expanding global footprint.
Deckers Wholesale Segment- A Key Growth Factor
Deckers also benefits from a robust wholesale channel, which contributes significantly to its overall revenues. This channel, combined with growing brand recognition, has allowed the company to broaden its market reach. In the second quarter, wholesale revenues increased 20.2% year over year to $913.7 million, reflecting the channel's robustness and ability to drive incremental sales.
This growth was driven by significant contributions from both the HOKA and UGG brands. HOKA recorded a 33% increase in wholesale revenues, while UGG grew 14%. Additionally, international markets outperformed domestic growth rates, highlighting the brand's global momentum. The wholesale channel benefitted from early shipments as partners sought to secure inventory ahead of peak seasons, reflecting robust consumer demand.
Deckers’ Strong Outlook for FY25
Deckers' robust expansion strategy has been a significant driver of its growth. The company now expects total revenues to increase by approximately 12% to reach $4.8 billion in fiscal 2025, up from the previous forecast of about $4.7 billion. HOKA is projected to achieve year-over-year growth of around 24%, while UGG is anticipated to record mid-single-digit growth.
The gross margin is estimated to range between 55% and 55.5%, an improvement from the earlier projection of 54%. Furthermore, management forecasts earnings per share in the range of $5.15 to $5.25, up from $4.86 last year and surpassing the prior guidance of $4.96 to $5.11 per share.
Estimate Revisions Favoring DECK Stock
Analysts have responded positively to Deckers’ prospects, which is reflected in upward revisions in the Zacks Consensus Estimate for earnings per share. In the past 30 days, analysts have increased their estimates for the current fiscal year by 17 cents. The consensus estimate for earnings is pegged at $5.47 per share.
The consensus estimate for earnings for the next fiscal year has also been raised 37 cents to $6.20 per share. The Zacks Consensus Estimate for the current and next fiscal year’s sales is pegged at $4.87 billion and $5.35 billion, indicating year-over-year growth of 13.6% and 9.8%, respectively.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
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Conclusion
Investors may find Deckers stock appealing due to its strong upward momentum, driven by consistent growth in both its DTC and wholesale channels. The company’s focus on innovation, global expansion, and successful brand management has positioned it for long-term success. With continued growth from its core brands, HOKA and UGG, and an expanding international presence, Deckers is well-positioned for future growth. Analysts have shown confidence in the company’s prospects, making DECK an attractive investment for those seeking exposure to a resilient, growth-focused business. Deckers currently sports a Zacks Rank #1 (Strong Buy).
Other Key Picks
Some other top-ranked stocks are Abercrombie & Fitch Co. ANF, Gildan Activewear Inc. GIL and Steven Madden, Ltd. SHOO.
Abercrombie is a specialty retailer of premium, high-quality casual apparel. It carries a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
ANF delivered a 16.8% earnings surprise in the last reported quarter.
The Zacks Consensus Estimate for Abercrombie’s fiscal 2025 earnings and sales indicates growth of 64.8% and 13.2%, respectively, from fiscal 2024 reported levels. ANF has a trailing four-quarter average earnings surprise of 28%.
Gildan is a manufacturer and marketer of premium quality branded basic activewear for sale principally in the wholesale imprinted activewear segment of North America’s apparel market. It currently carries a Zacks Rank #2.
The consensus estimate for Gildan’s current financial-year earnings and sales indicates growth of 15.6% and 1.5%, respectively, from figures of 2023. GIL has a trailing four-quarter average earnings surprise of 5.4%.
Steven Madden designs, sources, markets, and sells fashion-forward name-brand and private-label footwear. It currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for Steven Madden’s 2024 earnings and sales indicates growth of 8.2% and 13.4%, respectively, from the year-ago actuals. SHOO has a trailing four-quarter average earnings surprise of 9.8%.
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Free: See Our Top Stock And 4 Runners UpAbercrombie & Fitch Company (ANF) : Free Stock Analysis Report
Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
Gildan Activewear, Inc. (GIL) : Free Stock Analysis Report
Steven Madden, Ltd. (SHOO) : Free Stock Analysis Report
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