Deckers Outdoor Corporation
) is slated to report its fourth-quarter 2011 financial results on
February 23, 2012. The Zacks Consensus Estimate for the quarter
stands at $3.12 per share, representing an estimated year-over-year
increase of about 37%. Revenue, as per the Zacks Consensus
Estimate, is $562 million.
Previous Quarter Performance
Deckers delivered better-than-expected third-quarter 2011
results on the heels of healthy demand for the product lines under
the UGG and Teva brands, and the acquisition of the Sanuk
The quarterly earnings of $1.59 per share surpassed the Zacks
Consensus Estimate of $1.34, and surged 48.6% from $1.07 in the
Deckers, which competes with
), stated that total net sales jumped 49.1% to $414.4 million from
the prior-year quarter, outpacing the Zacks Consensus Estimate of
Agreement of Estimate Revisions
Analysts' are positively biased about the company's upcoming
earnings. Of the 14 analysts covering the stock, 2 revised their
estimates upward in the last 30 days, while one moved in the
opposite direction. For fiscal 2011, 3 analysts revised their
estimates upward while one lowered the same.
Magnitude of Estimate Revisions
The company has not experienced any movement in fourth-quarter
estimates over the last 30 days.
Some analysts remain cautious about the unseasonably warm
winter, which is likely to hit the sales of UGG brand, one of the
major revenue contributors to the company. Moreover, rising input
costs are taking a toll on margins. However, some analysts
believe that sales of the brand are high irrespective of these
Positive Earnings Surprise History
With respect to earnings surprises, Deckers has topped the Zacks
Consensus Estimate over the last four quarters in the range of 4.3%
to 20.8%. The average remained at 14.5%. This suggests that Deckers
has outperformed the Zacks Consensus Estimate by the same magnitude
over the trailing four quarters.
Deckers, in order to seek better prospects and enhance its
earnings potential, has taken a number of initiatives including
diversification of merchandise offering, resumption of
distribution rights in significant geographic areas, rapid retail
store openings, acquisition of Sanuk brand, and strengthening of
Deckers' top line has increased at a CAGR of 35% in the last
five years. The company's robust growth in all its divisions and
sustained focus on new product introductions along with geographic
expansion have helped to achieve healthy results.
Further, the international markets provide a significant growth
opportunity, and we remain optimistic about the company's
incremental sales and earnings potential. Internationally, the
company distributes its products throughout Europe, Asia Pacific,
Canada and Latin America.
However, we are cautious about the rising input costs and higher
inventory, which will largely affect its margins in the near term.
Deckers holds a Zacks #4 Rank, which translates into a short-term
'Sell' rating. However, considering the fundamentals, we are
maintaining a long-term 'Neutral' recommendation on the stock.
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