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Deckers Outdoor (DECK) Q3 Earnings: Is a Beat in Store?

Deckers Outdoor Corp.DECK , a leading designer, producer and brand manager of innovative, niche footwear and accessories, is slated to report third-quarter fiscal 2017 results on Feb 2. The question lingering in investors' minds now is, whether the company will be able to deliver a positive earnings surprise in the quarter to be reported.

In the previous quarter, the company had reported positive earnings surprise of 3.4%. Notably, in the trailing four quarters, it outperformed the Zacks Consensus Estimate by an average of 25.2%. Let's see how things are shaping up prior to this announcement.

Deckers Outdoor Corporation Price, Consensus and EPS Surprise

Deckers Outdoor Corporation Price, Consensus and EPS Surprise | Deckers Outdoor Corporation Quote

Zacks Model Shows Likely Earnings Beat

Our proven model shows that Deckers Outdoor is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. The Most Accurate estimate stands at $4.27, while the Zacks Consensus Estimate is pegged at $4.24. So the ensuing difference - the Earnings ESP - is of +0.71%. A positive ESP combined with the company's Zacks Rank #3, makes us reasonably confident of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Factors Influencing this Quarter

Deckers' focus on expanding its brand assortments, bringing more innovative line of products, targeting consumers digitally via marketing and sturdy eCommerce, and optimizing omni-channel distribution bode well. These initiatives not only aided the stock to outperform the Zacks Categorized industry so far in the past one year but also helped post positive earnings surprise for the sixth straight quarter. We noted that Deckers' shares have increased 19.8% in the past one year period, compared with the Zacks categorized Shoes & Retail Apparel sector that witnessed a decline of 14.2%.

Deckers targets profitable and underpenetrated markets, along with focus on product innovations and store augmentation. Further, management is transitioning to a direct subsidiary model from a distributor model outside the U.S. The company is also making substantial investments to fortify its online presence. Deckers focuses on opening smaller concept omni-channel outlets and expanding programs, such as Retail Inventory Online; Infinite UGG; Buy Online, Return In Store; and Click and Collect, in a bid to enhance customers' shopping experience.

Amid tough retail landscape, management had earlier trimmed its fiscal 2017 outlook. Deckers expects net sales to decline in the band of 1.5-3% and projects earnings between $4.05 and $4.25 per share. The company had earlier forecast net sales to be flat to down 3% and earnings in the range of $4.05-$4.40 for fiscal 2017. In the third quarter, net sales are estimated to be flat to down 2%.

Other Stocks Poised to Beat Earnings Estimates

Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:

Dollar Tree, Inc. DLTR has an Earnings ESP of +0.75% and carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.

Costco Wholesale Corporation COST has an Earnings ESP of +0.74% and currently has a Zacks Rank #3.

Fred's, Inc. FRED has an Earnings ESP of +5.88% and also carries a Zacks Rank #3.

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Dollar Tree, Inc. (DLTR): Free Stock Analysis Report

Costco Wholesale Corporation (COST): Free Stock Analysis Report

Fred's, Inc. (FRED): Free Stock Analysis Report

Deckers Outdoor Corporation (DECK): 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.


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

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