Shares of Deckers Outdoor Corp. (DECK) touched a 52-week high of $99.80 yesterday before eventually closing at $98.60. The optimism in the stock is well reflected in its continuous investments in brand development, its omni-channel capacities and consistent strength in its UGG brand. Apart from this, the company has been undertaking initiatives to improve the supply chain so as to curtail costs and enhance efficiency.
Deckers’ primary strength is its earnings surprise history. The company outperformed the Zacks Consensus Estimate in 9 consecutive quarters, with an average beat of 32.5%. In the last concluded quarter, this designer and producer of footwear and accessories outdid the Zacks Consensus Estimate by 18.3%. The company’s better-than-expected first-quarter fiscal 2015 results provided much impetus to this Zacks Rank #2 (Buy) stock that has surged 16% since the announcement on Jul 24.
The company incurred a loss of $1.07 per share that was narrower than the Zacks Consensus Estimate of a loss of $1.31. Moreover, net sales surged 24.3% year over year to $211.5 million and came ahead of the Zacks Consensus Estimate of $191 million.
Top-line growth was fueled by robust demand for its brands, stellar e-Commerce growth and the company’s omni-channel capability. Going forward, Deckers plans to open smaller concept omni-channel outlets and expand a new tool “Retail Inventory Online” to help customers locate products before they visit its outlets.
Following the impressive quarter, management raised its sales and earnings guidance for the year. Deckers now projects total revenue growth of 14% for fiscal 2015, up from 13% forecast earlier. Also, management now envisions a 14.5% rise in earnings per share for the fiscal year, up from the 13.5% jump expected earlier.
We see Deckers as a solid bet for investors as evident from its inherent strength and long-term earnings growth projection of 14%. Apart from Deckers, Church & Dwight Co. Inc. (CHD), The Clorox Company (CLX) and Leggett & Platt, Incorporated (LEG) also hit 52-week highs of $70.74, 98.31 and $35.94, respectively, on Sep 22.
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