Deckers Outdoors, the popular footwear maker, experienced a significant surge in its stock price, rising by 14% on Friday following its impressive earnings report. The company's strong performance has sparked optimism among investors, signaling that the upward momentum could continue.
During its fiscal third quarter, Deckers reported earnings of $15.11 per share, surpassing consensus estimates. Additionally, the company witnessed a notable 16% increase in revenue, reaching a total of $1.56 billion. Furthermore, Deckers achieved impressive gross margins, with figures approaching 59%.
Deckers, known for brands such as Ugg and Hoka, expects this positive trend to persist and has adjusted its forecasts accordingly. For the full fiscal year ending on March 31, the company anticipates a 14.4% revenue climb to $4.15 billion, surpassing the consensus estimate of $4.088 billion. The projected full-year earnings per share range between $26.25 and $26.50, exceeding analysts' expectations of $23.84.
Additionally, Deckers recently announced that its CEO Dave Powers, a respected industry veteran, will retire on August 1. Despite this unexpected departure, investors remain enthusiastic about the company's performance and future prospects.
Deckers' shares experienced a remarkable surge of 14% in recent trading, reaching $880.14 per share. This achievement is particularly noteworthy considering that recent earnings beats have not resulted in similarly positive investor reactions throughout this reporting season.
Since the recommendation of Deckers shares over a year ago in October 2022, the stock has soared by an astonishing 160%, significantly outperforming the broader market.
Furthermore, the recent price surge of Deckers stock has aligned it with analysts' price targets. Although these targets may be revised upward in light of the latest results, it underscores the rapid pace at which the stock has caught up even with high market expectations.
Given Deckers' robust financial performance and promising outlook, it is difficult to envision a scenario in which the company falters.
Deckers' Strong Performance Continues to Impress Analysts
Deckers, the footwear company, has once again delivered exceptional results, leaving analysts impressed. Baird analyst Jonathan Komp describes it as a "blowout quarter," with the company's forecast surpassing even the highest expectations.
What makes Deckers' success even more remarkable is that many of its competitors in the footwear industry have been struggling. Skechers, for example, experienced a dip in sales, causing its shares to suffer.
On the other hand, Deckers continues to achieve record-breaking results, demonstrating significant market share gains. Truist analyst Joseph Civello, who rates the stock as a "Buy," believes the Ugg and Hoka brands will maintain their momentum due to robust product pipelines and strong customer relationships.
The positive update from Deckers has garnered widespread praise on Wall Street, even from analysts who were initially cautious. Wells Fargo analyst Ike Boruchow, although remaining on the sidelines regarding the stock, admits there are no weaknesses to be found in the quarter's performance.
"While valuation remains a concern, it is difficult to overlook the growing momentum in Deckers' story," Boruchow added.
Similarly, Jefferies analyst Ashley Helgans, who rates the stock as a "Hold," found several aspects of Deckers' earnings report worth applauding. Notably, she highlighted the company's strong margins and fashion-forward approach.
Although it may be unlikely for Deckers' stock to replicate the exceptional gains witnessed in 2023 when it soared over 70%, investors should not underestimate its potential for continued success.