Deckers Outdoor Corp. (DECK) continues to impress investors with its product innovation, cost containment, store augmentation and strong focus on profitable markets. The company is optimistic about its future performance, given its continuous investments in brand development, omni-channel capacities, optimum capital allocation and strong fall collection.
The stock has been gaining momentum ever since it posted narrower-than-expected loss for first-quarter fiscal 2015. The company incurred loss of $1.07 per share that fared better than the Zacks Consensus Estimate of loss of $1.31, thanks to strong demand for UGG, Teva, Sanuk and HOKA brands.
However, what came as a drawback was that the loss per share for the quarter under review increased from a loss of 85 cents reported in the year-ago quarter due to higher selling, general and administrative expenses.
On the contrary, net sales rose 24.3% year over year to $211.5 million, coming ahead of the Zacks Consensus Estimate of $191 million.
Top-line growth was fuelled by robust demand for its brands, stellar eCommerce 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 visiting the 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% forecasted earlier. Also, management now envisions a 14.5% rise in earnings per share for the fiscal year, up from the 13.5% jump envisioned earlier.
However, stiff competition from other footwear companies including Skechers USA Inc. (SKX), Iconix Brand Group, Inc. (ICON) and Brown Shoe Co. Inc. (BWS) may act as a hurdle. With significant financial, technological, marketing and manufacturing advantages, these competitors may impact the company’s sales and margins.
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