Deckers Outdoor Corporation DECK has been constantly trying to counter intense competition in the retail space. The company is targeting profitable and underpenetrated markets and is focused on product innovation, store expansion and enhancing e-commerce capabilities.
The company’s focus on targeting consumers digitally and optimizing omni-channel distribution bodes well. In line with the changing trends, Deckers has been constantly developing its e-commerce portal to drive incremental sales. The company has made substantial investments to strengthen its online presence and improve shopping experience.
This Zacks Rank #2 (Buy) company is focused 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 to enhance customers’ shopping experience.
As part of the company’s store fleet optimization plan, Deckers had earlier informed about plans to close approximately 30 to 40 outlets over the next two years. By fiscal 2020, Deckers expects company-owned fleet of approximately 125 stores worldwide. These actions are likely to boost profits and shareholders’ return as well as enhance brand and store performance. Moreover, management expects cost savings of about $150 million on the back of improvement in cost of goods sold and SG&A savings.
Apart from the above-mentioned factors, Deckers is focusing on product and marketing strategies that are more skewed toward customers. Moreover, the company is focusing on expanding its product categories in line with purchasing trends that differs with weather conditions. In fact, in order to drive incremental sales and margins, the company is selling directly to wholesale customers.
We believe that aforementioned factors are likely to keep the stock on growth trajectory. Deckers has outperformed the industry in the past six months. The company’s shares have rallied 43.6% in the said period, compared with the industry's gain of 17.3%.
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