| Price | 86.03 |
| Price Change Today | 0.00 (0.00%) |
| P&P rating | ![]() |
| Zacks Rank | 4 - SELL |
| Open Price | $0.00 |
| Previous Close | $86.03 |
| Daily Range | $0.00 - $0.00 |
| 52-Week Range | $72.78 - $118.90 |
| Volume | 0 |
| DECKERS OUTDOOR CORP. designs, manufactures, and markets innovative, function-oriented footwear and apparel that have been developed for high-performance outdoor, sports and other lifestyle related activities, as well as for casual use. | |





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Deckers Outdoor Corp.
By: Michael Vodicka
March 09, 2011
Continues to trade near its 52-week high on strong Q4 results from late February that included a 14% earnings surprise. With estimates on the upswing and a bullish growth projection, this Zacks #1 rank stock has momentum to boot.
Company Description
Deckers Outdoor Corp. designs and sells footwear and accessories worldwide. It is the company makes the very popular Ugg boots.The company was founded in 1973 and has a market cap of $3.4 billion.
Shares of Deckers have almost doubled over the last six months, helped by strong Q4 results from February 24 that came in well ahead of expectations.
Fourth-Quarter Results
Revenue for the period was up 24% from last year to $430 million. Earnings also came in strong at $2.27, 14% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 53% over the last four quarters.
Its highest revenue brand UGG was in line with overall revenue growth at 24% to $413 million. International sales were up 35% to $53 million. e-Commerce was also strong, up 30% to $60 million.
Deckers also saw solid margin expansion, with gross margin climbing to 54.2% from 49.8% last year.
Financial Profile
Deckers also has some serious financial strength, with cash and equivalents up $129 million from last year to $445 million and no long-term debt.
Estimates
We saw some decent movement in estimates off the good quarter, with the current year adding 32 cents to $4.53 and the next-year estimate climbing 53 cents to $5.33, a bullish 18% growth projection.
Valuation
But in spite of the gains, DECK still looks reasonably valued, trading with a PEG Ratio (PE/Growth) only slightly over 1, the traditional benchmark for value.
12-Month Chart
On the chart, DECK is once again trading near its 52-week high after rallying in February. Look for support from the long-term trend on any weakness.
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Personally, I never short a stock that tends to beat estimates by a wide margin whose consensus estimates are rising. Historically, this is a very losing short trade. This one is in the top echelons in that category (the Zacks rank is 1). Also, same store sales have been growing very strongly, international sales are going well and the Uggs product line never seems to go out of style. Add to that analysts are saying that boots will be a strong fashion trend this year which will help Deckers a lot and the Uggs boot line.
Add to that a P/E ratio of around 12 with a high expected earnings growth rate. It sells a higher quality product that consumers are gravitating toward as the economy improves. This is showing up in sales numbers for high-end retailers.
Boy, there's a lot of reasons not to short this stock. This is probably one of the least shortable stocks in the market right now given its strong business momentum, low valuation and being in the red hot shoe sector. But then again, who knows? If the company misses, the stock will get hit. However, I think this is unlikely.
Keep in mind I have a soft spot for Deckers. I had this as a top pick a few years ago in our newsletter right before it took off. As I remember it, it was in April of that year. History does repeat itself.
Brian C Neall
Founder - Tradetobefree.com
2 Week Free Trial.
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