Deckers Outdoor Corporation (DECK – Free Report) has demonstrated strong upward momentum, trading above its 50 and 200-day simple moving averages (SMA). SMA is a key indicator of price stability and long-term bullish trends.
DECK ended Friday’s trading session at $207.11, above its 50 and 200-day SMA of $184.79 and $161.58, respectively, highlighting a continued uptrend. This technical strength, along with sustained momentum, indicates positive market sentiment and investors’ confidence in Deckers’ financial health and growth prospects.
DECK Trades Above 50 & 200-Day Moving Averages
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Shares of this leading designer and producer of innovative, niche footwear and accessories are 3.5% below its 52-week high of $214.70 attained on Dec. 20, 2024, making investors contemplate their next moves. In the past three months, DECK stock has gained 33.1% compared with the Zacks Retail-Apparel and Shoes industry’s 13.2% growth.
The company’s enhanced operational efficiency and growth initiatives have also helped it to outperform the broader Retail-Wholesale sector and the S&P 500 index’s growth of 7.2% and 5.2%, respectively, during the same period.
DECK Stock Past Three-Month Performance
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DECK Boosts Market Position Through Innovation, DTC Business
Deckers has reinforced its standing in the competitive footwear industry with a strategic emphasis on innovation and direct-to-consumer (DTC) growth. The company’s core brands, UGG and HOKA, are central to this success. HOKA is on track to become a multi-billion-dollar brand, while UGG continues to solidify its status as a global lifestyle icon.
In the second quarter of fiscal 2025, HOKA saw an impressive 34.7% increase in sales and UGG experienced 13% growth. This success is attributed to a broad product portfolio and optimized distribution strategies, allowing Deckers to sustain strong market momentum. We anticipate year-over-year increases of 24% and 5.4% in net sales for the HOKA and UGG brands, respectively, in fiscal 2025.
The company’s thriving DTC business also played a key role, with net sales rising 19.9% to $397.7 million and comparable net sales increasing 17%. Deckers has enhanced its digital capabilities and omnichannel presence, ensuring seamless customer experiences and expanded brand reach. We foresee 12.6% growth in DTC revenues in fiscal 2025.
Wholesale Channels: A Key Factor of Deckers
Deckers continues to benefit from a robust wholesale channel, which plays a vital role in its revenue growth and market expansion. In the fiscal second quarter, wholesale revenues surged 20.2% year over year, reaching $913.7 million, highlighting the channel’s success in driving additional sales.
This growth was driven by strong performances from HOKA and UGG, with wholesale revenues rising 33% and 14%, respectively. Early inventory shipments by retail partners ahead of peak seasons further boosted the channel’s success, signaling strong consumer demand.
Global Expansion Fuels International Growth for DECK
Deckers’ international expansion is a key component of its growth strategy. In the fiscal second quarter, international sales jumped 33% year over year, reflecting strong performances from UGG and HOKA in global markets. Strategic investments in new stores and retail locations have further strengthened the company’s global presence.
By expanding across multiple regions and capitalizing on the growing popularity of its flagship brands, Deckers is tapping into new markets and consumer bases. This international growth complements its domestic success, driving its continued upward trajectory in fiscal 2025 and beyond. We expect revenues from international regions to increase 15.5% in fiscal 2025.
Optimistic FY25 Outlook for Deckers
Deckers’ expansion strategy remains a central element of its growth, with total revenues for fiscal 2025 projected at $4.8 billion, marking a 12% increase from the previous year. HOKA is expected to achieve 24% year-over-year growth while UGG is anticipated to see mid-single-digit growth.
The company has also revised its gross margin outlook to 55-55.5%, up from the previous estimate of 54%. Additionally, earnings per share (EPS) guidance has been raised to $5.15-$5.25 from the earlier range of $4.96-$5.11, reflecting improved profitability from $4.86 in the prior year.
Estimate Revisions Favor Deckers Stock
Analysts have responded positively to Deckers’ prospects, which has been reflected in upward revisions in the Zacks Consensus Estimate for EPS. In the past 30 days, analysts have increased their estimates for the current fiscal year by one penny. The consensus estimate for earnings is pegged at $5.49 per share.
The consensus estimate for earnings for the next fiscal year has been raised one penny to $6.22 per share. The Zacks Consensus Estimate for the current and the next fiscal year’s sales is pegged at $4.87 billion and $5.36 billion, indicating year-over-year growth of 13.6% and 10%, respectively.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
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Conclusion
Investors might consider Deckers stock due to its strong upward momentum and performance above key moving averages, reflecting strong market confidence. The company’s innovative brands like HOKA and UGG drive significant growth, particularly in its DTC and wholesale channels. Its successful global expansion and positive fiscal outlook for 2025 further boost investor optimism, with analysts raising earnings and sales estimates. This positions Deckers for continued growth and profitability. The company currently carries a Zacks Rank #2 (Buy).
Other Key Picks
Other top-ranked stocks are The Gap, Inc. (GAP – Free Report) , Abercrombie & Fitch Co. (ANF – Free Report) and Steven Madden, Ltd. (SHOO – Free Report) .
Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Gap’s fiscal 2025 earnings and sales indicates growth of 41.3% and 0.8%, respectively, from the fiscal 2024 figures. GAP has a trailing four-quarter average earnings surprise of 101.2%.
Abercrombie is a specialty retailer of premium, high-quality casual apparel. It sports a Zacks Rank of 1 at present.
The Zacks Consensus Estimate for Abercrombie’s fiscal 2025 earnings and sales indicates growth of 69.3% and 15%, respectively, from the fiscal 2024 levels. ANF has a trailing four-quarter average earnings surprise of 14.8%.
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 8.6% and 13.6%, respectively, from the year-ago actuals. SHOO delivered a trailing four-quarter average earnings surprise of 9.8%.
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