Deckers Outdoor Corporation DECK has been witnessing a downtrend in the Zacks Consensus Estimate since this designer and producer of footwear and accessories disappointed with its third-quarter fiscal 2015 performance. Management pointed out that the sluggish October and November selling period hurt results. Share price of this Zacks Rank #4 (Sell) company has plunged roughly 12.3% since the earnings announcement on Jan 29, 2015.
Deckers, which competes with Nike, Inc. NKE, let down investors on the earnings front, posting a negative earnings surprise of 0.4%, after two successive earnings beat in financial year 2015 followed by the subsequent trimming of its outlook. Analysts polled by Zacks are now less constructive on the stock. This is evident from the movement witnessed in the Zacks Consensus Estimate that tumbled 4% to $4.59 per share for fiscal 2015 and 9.6% to $5.11 per share for fiscal 2016 over the past 60 days.
The quarterly earnings of $4.50 per share missed the Zacks Consensus Estimate by a couple of cents, while net sales of $784.7 million fell short of the Zacks Consensus Estimate of $811 million. A strong U.S. dollar and higher wholesale order cancellations weighed upon the company’s top-line performance.
However, year-over-year net sales growth of 6.6% and the increase of 11.4% in earnings per share provided some relief to investors. Sales trends remained sturdy across the Direct-to-Consumer division, while omni-channel initiatives boosted consumer experience. But these did not restrain management from lowering its projection for fiscal 2015.
Following lower-than-expected results, management cut its forecast. Management now projects total revenue growth of 13.5% to $1.8 billion for fiscal 2015, down from 15% predicted earlier. The company also expects earnings for the fiscal to rise 12.6% to $4.58 per share, down from a 15.8% jump predicted earlier.
Stocks to Consider
Better-ranked retail stocks that look promising and are expected to continue with their upbeat performance include Skechers USA Inc. SKX, sporting a Zacks Rank #1 (Strong Buy) and Iconix Brand Group, Inc. ICON, carrying a Zacks Rank #2 (Buy).
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