On Dec 28, 2013, Zacks Investment Research upgraded
Deckers Outdoor Corporation
), the designer and producer of footwear and accessories, to a
Zacks Rank #1 (Strong Buy). The stock has amassed a year-to-date
return of 118.1%.
Why the Upgrade?
The challenging macroeconomic environment compelled Deckers to
resort to various means for repositioning itself and keep afloat.
Such measures include focusing on new product introductions,
effective cost management and new store openings. This is well
reflected through Deckers' better-than-expected third-quarter
2013 bottom-line results.
The company posted quarterly earnings of 95 cents a share that
surpassed the Zacks Consensus Estimate of 72 cents, buoyed by the
expansion of direct-to-consumer operations, omnichannel
strategies, effective inventory management and optimum capital
allocation. Deckers' total net sales jumped 2.7% year over year
to $386.7 million and came almost in line with the Zacks
Management continues to project total revenue growth of 8% for
2013, while it envisions a 10% rise in earnings per share, up
from 8% predicted earlier.
Following sturdy results, the analysts become more
constructive on the stock's future performance. Consequently, the
Zacks Consensus Estimate for 2013 increased 1.5% to $3.94, while
for 2014 it rose 2.2% to $4.75 per share in the last 60 days.
The earnings surprise history of the company also sparks
optimism about its future upbeat performance. Deckers has
outperformed the Zacks Consensus Estimate in the last four
quarters by an average of 48.1%.
Deckers is also expanding its footprint by targeting
profitable markets. This is well evident from the company's
retail store sales that rose 34.5%. Management is eyeing
opportunities for store expansion in Asia, mainly Japan and
China, and seeks to enhance the company's presence in South
Korea, Taiwan, Mongolia, Singapore and Australia.
Other Stocks that Warrant a Look
Other stocks worth considering in the retail sector include
Iconix Brand Group, Inc.
Finish Line Inc.
The Men's Wearhouse, Inc.
) all carrying a Zacks Rank #2 (Buy).
DECKERS OUTDOOR (DECK): Free Stock Analysis
FINISH LINE-CLA (FINL): Free Stock Analysis
ICONIX BRAND GP (ICON): Free Stock Analysis
MENS WEARHOUSE (MW): Free Stock Analysis
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