2024-04-13 07:46:51 ET
Summary
- Deckers Outdoor Corporation saw a 38% increase in quarterly direct to consumer net sales for its HOKA brand.
- The company's business model relies on outsourcing manufacturing, allowing for a light asset base and higher operating margins.
- In the last quarterly report, the company noted $1.046 billion remaining under its stock repurchase authorization. Hence, I believe that there is significant room for large stock repurchases.
- Taking into account double digit net sales growth, internationalization, and scalability, I think that we can expect future net income growth.
Deckers Outdoor Corporation ( DECK ) brought a quarterly direct to consumer net sales increase of 38% y/y, and better EPS than expected. I believe that the company is doing much better than peers out there. If we also take into account internationalization efforts, the stock repurchase program, and the total amount of cash in hand, DECK is a must follow stock. There are clear risks coming from supply chain issues and lower FCF margins than expected. With all that being said, the results of my DCF model imply significant upside potential.
Deckers Outdoor’s Business Model: A Light Asset Base
There are five brands through which Deckers Outdoor Corporation markets its products: UGG, HOKA, Teva, Sanuk, and Koolaburra. These brands meet the demands of fashion and clothing markets, including sports and casual clothing specialties....
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Deckers' Growth Story: Light Asset Base, And Direct-To-Consumer Success