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Deckers (DECK) Runs Ahead of its Peers: Surges 80% in a Year


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In an intensely competitive retail landscape, Deckers Outdoor Corporation DECK has done exceedingly well and emerged as an attractive investment option. This is quite evident from the stock's performance in a year. In the said period, the stock has surged 80.3% compared with the industry 's gain of 17.5%.

We believe there is still momentum left in this Zacks Rank #1 (Strong Buy) stock, which is quite evident from its long-term impressive earnings growth rate of 11.6% and a VGM Score of A. You can see the complete list of today's Zacks #1 Rank stocks here .

Stocks such as Wolverine World Wide WWW , NIKE NKE and Carter's CRI which belong to the same industry has witnessed a gain of 16.1%, 15.4% and 34%, respectively, in a year. Let's delve deeper and find out the reason that kept Deckers Outdoor ahead of its peers. 

Focus on Profitable & Underpenetrated Markets

Deckers Outdoor is targeting profitable and underpenetrated markets, and remains focused on product innovations, store expansion and enhancing e-commerce capabilities. In fact, the company's focus on expanding its brand assortments, bringing more innovative line of products, targeting consumers digitally and optimizing omni-channel distribution is impressive. Moreover, the company intends to expand its product categories according to the customer purchasing trends that keep changing with weather.

Earlier, management had stated that it expects total sales of about $2 billion, with operating margin of 13% by fiscal 2020. For fiscal 2018, Deckers has set operating margin goal of 12%. Net sales are anticipated in the band of $1,873-$1,878 million and adjusted earnings per share in the $5.37-5.42 range, up from $3.82 in the previous year. Gross margin for the fiscal year is anticipated to be 49%.

Restructuring Plan Bodes Well

Deckers Outdoor has undertaken strategic initiatives in an effort to drive long-term growth. Notably, its store-fleet optimization plan focuses on striking the right balance between digital and physical stores. Also, the company expects cost savings of about $150 million backed by improvement in cost of goods sold and SG&A savings, which includes consolidation of retail outlets and process improvement efficiencies. This, in turn, is likely to help realize $100-million operating profit improvement by fiscal 2020.

Solid Surprise History

Deckers Outdoor has impressed investors with its quarterly results in the preceding quarters. In the trailing four quarters, both earnings and sales have surpassed the consensus mark by an average of 96.4% and 9.6%, respectively. In third-quarter fiscal 2018, sturdy sales performance across UGG, HOKA ONE ONE and Teva brands enabled Deckers to deliver sturdy results. Encouraging retail scenario and favorable weather conditions along with latest tax reform and improved margins as well as share repurchases also aided the results.

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Carter's, Inc. (CRI): Free Stock Analysis Report

NIKE, Inc. (NKE): Free Stock Analysis Report

Deckers Outdoor Corporation (DECK): Free Stock Analysis Report

Wolverine World Wide, Inc. (WWW): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Stocks
Referenced Symbols: CRI , NKE , DECK , WWW



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