Deckers Outdoor Corporation DECK is trading at a notably high price-to-earnings (P/E) multiple, well above the Zacks Retail-Apparel and Shoes industry and broader Retail-Wholesale sector averages. DECK’s forward 12-month P/E ratio sits at 28.12, significantly higher than the industry’s average of 16.19 and the sector’s average of 23.35.
This valuation has been the result of the significant rise in Deckers’ stock price in the past year due to its strategic emphasis on expanding brand presence and strengthening direct-to-consumer (DTC) channels. Closing at $935.07 as of Sept. 13, the DECK stock is moving toward its 52-week high of $1106.89 attained on June 3, 2024.
The stock has rallied 77.7%, comfortably outpacing the industry’s modest 27.2% growth. The company’s commitment to innovation in product development and a strong focus on international market expansion enabled it to outperform the broader sector and the S&P 500 index, which grew 24.2% and 25.7%, respectively, during the same period. Deckers’ stockholders approved a six-for-one forward stock split during the annual meeting on Sept. 9, 2024. This approval also includes a proportional increase in the number of authorized common stock shares.
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Technical indicators are supportive of Deckers’ strong performance. The stock is trading above its 200 and 50-day moving average, indicating robust upward momentum and price stability. This technical strength reflects positive market perception, and confidence in DECK’s financial health and prospects.
DECK’s Strategic Focus Drives Growth & Leadership
Deckers has achieved significant growth by targeting high-margin markets, fostering innovation, expanding retail and enhancing e-commerce. This strategy has boosted the popularity of UGG and HOKA, while broadening its global presence. The company aims to make HOKA a multibillion-dollar brand and transform UGG into a global lifestyle icon.
The DTC business and omnichannel strategy have shown strong results, with DTC net sales rising 24% in the first quarter of fiscal 2025. Aligning product development and distribution with consumer preferences has driven growth, while store openings and market expansions improve brand accessibility and customer experience.
Innovation is central to Deckers’ strategy, with the launch of performance-driven products like the Cielo X1 and Skyward X. Wholesale also remains crucial, with revenues rising 21% in the first quarter, driven by strong results in the United States and Europe. International sales grew 20.8%, fueled by DTC expansion and key partnerships in China and EMEA.
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Deckers Forecasts Strong FY25 Growth
Deckers forecasts a 10% rise in net sales, reaching $4.7 billion in fiscal 2025. HOKA is expected to grow 20%, driven by the strong performance in the DTC channel, expanded partnerships andglobal marketexpansion.
UGG is projected to see mid-single-digit growth, supported by international expansion and a solid U.S. market. Earnings per share are estimated between $29.75 and $30.65, up from $29.16 in the previous year.
Conclusion
Investors should consider DECK due to its impressive growth trajectory and strong market position. The company's strategic focus on high-margin markets, DTC expansion and innovative product development has driven significant stock appreciation, outpacing both its industry and broader market benchmarks.
Trading at a higher P/E ratio than its peers reflects investor confidence in DECK's future potential, while technical indicators such as trading above key moving averages signal strong momentum. With its commitment to making HOKA a multibillion-dollar brand and transforming UGG into a global lifestyle icon, along with strong financial forecasts for fiscal 2025, DECK offers a compelling opportunity for long-term growth. Deckers currently carries a Zacks Rank #2 (Buy).
Other Key Picks
Some other top-ranked stocks are Boot Barn Holdings, Inc. BOOT, Abercrombie & Fitch Co. ANF and Steven Madden, Ltd. SHOO.
Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Boot Barn’s fiscal 2025 earnings and sales indicates growth of 10.7% and 11.6%, respectively, from the fiscal 2023 reported figures. BOOT has a trailing four-quarter average earnings surprise of 7.1%.
Abercrombie is a specialty retailer of premium, high-quality casual apparel. It flaunts a Zacks Rank #1 at present. ANF delivered a 16.8% earnings surprise in the last reported quarter.
The consensus estimate for Abercrombie’s fiscal 2025 earnings and sales indicates growth of 63.4% and 12.6%, respectively, from the fiscal 2024 reported levels. ANF has a trailing four-quarter average earnings surprise of 28%.
Steven Madden designs, sources, markets, and sells fashion-forward name-brand and private-label footwear. It currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for Steven Madden’s 2024 earnings and sales indicates growth of 6.9% and 12.6%, respectively, from the year-ago actuals. SHOO has a trailing four-quarter average earnings surprise of 9.5%.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
Boot Barn Holdings, Inc. (BOOT) : Free Stock Analysis Report
Steven Madden, Ltd. (SHOO) : Free Stock Analysis Report
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