2024-04-14 22:47:11 ET
Summary
- Deckers Outdoor has reported strong revenue and earnings growth in Q2 FY24, driven by strong consumer demand for its UGG and HOKA brands.
- The company is seeing success in its DTC channel and international expansion, with higher conversion rates and average transaction values, leading to stronger margins.
- The company can see short-term volatility as David Powers retires as CEO, and macroeconomic challenges and geopolitical tensions persist.
- Assessing both the "good" and the "bad", I believe that the stock is likely to decline further, which may lead to a better entry point in the future, making it a "hold" at the moment.
Introduction & Investment Thesis
Deckers Outdoor ( DECK ) is a casual lifestyle and performance-driven footwear, apparel, and accessories company that has outperformed the S&P 500 and Nasdaq 100 YTD. The company reported its Q3 FY24 earnings in February, where it saw revenue and earnings grow 16% and 44% YoY, respectively, beating estimates. For FY24, the company is projected to grow its revenue by 14.3% YoY to $4.15B while improving its operating margin by 200 basis points to 20%....
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Deckers Outdoor: A Compelling Growth Story, But Stock Likely To Fall Further In The Near Term