Company Overview - Deckers Outdoor Corporation (DECK) is currently positioned as an intriguing investment choice due to solid earnings estimate revisions and a favorable industry ranking [1][3]. - The company has experienced positive earnings estimate revisions over the past month, indicating increased analyst optimism regarding its short and long-term prospects [3]. Industry Analysis - The Retail - Apparel and Shoes industry has a Zacks Industry Rank of 72 out of more than 250 industries, suggesting it is well-positioned compared to other segments [2]. - The overall positive trends in the industry are likely benefiting multiple securities within the sector, indicating a rising tide effect [2]. Earnings Estimates - Current quarter earnings estimates for Deckers have increased from $2.44 per share to $2.49 per share, while current year estimates have risen from $5.49 per share to $5.55 per share [4]. - These revisions have contributed to Deckers earning a Zacks Rank 1 (Strong Buy), highlighting the company's strong market position [4]. Investment Consideration - Given the strong industry performance and solid estimate revisions, Deckers is recommended as a compelling option for investors seeking opportunities in the Retail - Apparel and Shoes sector [5].

Group 1: Deckers Outdoor (DECK) - Deckers Outdoor is a leading designer and producer of niche footwear and accessories for outdoor sports and lifestyle activities, currently holding a Zacks Rank 2 (Buy) [4] - The company has exceeded the Zacks Consensus EPS estimate by an average of 40% over the last four quarters, with a year-over-year EPS increase of 40% and a 20% growth in sales [5] - Strong consumer demand for HOKA and UGG brands has contributed to margin expansion, continuing a positive trend [7] Group 2: United Airlines (UAL) - United Airlines shares have doubled in value over the last six months, supported by strong quarterly releases and a positive outlook for the upcoming report on January 21, expecting 49% EPS growth and 5% higher sales [10][13] - The company has authorized a $1.5 billion share repurchase program, marking the first buyback since 2020, which is significant for shareholders [13] - Year-over-year capacity growth of 4.1% was highlighted in the latest report, indicating operational strength [13] Group 3: Tapestry (TPR) - Tapestry, formerly known as Coach, has a Zacks Rank 1 (Strong Buy) due to a positive EPS outlook and strong results from its Coach brand, which exceeded revenue and earnings forecasts [15] - The company has acquired 1.4 million new customers in North America, contributing to its growth [16] - Tapestry's gross margin improved to 75.3%, up from 72.5% in the previous year, reflecting strong margin expansion [17] Group 4: Market Overview - Despite some sluggishness in parts of the market towards the end of 2024, Deckers Outdoor, United Airlines, and Tapestry have continued to perform well, driven by strong EPS outlooks from their quarterly results [20]

Group 1 - The average brokerage recommendation (ABR) for Deckers (DECK) is 2.00, indicating a Buy, based on recommendations from 20 brokerage firms, with 45% as Strong Buy and 10% as Buy [2][4] - Brokerage analysts tend to exhibit a strong positive bias in their ratings, with five "Strong Buy" recommendations for every "Strong Sell" recommendation, which may mislead investors [5][9] - The Zacks Rank, which is based on earnings estimate revisions, is a more reliable indicator of a stock's near-term price performance compared to ABR [7][10] Group 2 - The Zacks Consensus Estimate for Deckers has increased by 0.8% over the past month to $5.53, indicating growing optimism among analysts regarding the company's earnings prospects [12] - The recent change in the consensus estimate, along with other factors, has resulted in a Zacks Rank 1 (Strong Buy) for Deckers, suggesting a potential for stock price appreciation [13]

Core Viewpoint - Deckers (DECK) is positioned well to continue its trend of beating earnings estimates, making it a stock worth considering for investors [1]. Group 1: Earnings Performance - Deckers has a strong history of surpassing earnings estimates, averaging a 27.66% beat over the last two quarters [2]. - In the last reported quarter, Deckers achieved earnings of $1.59 per share, exceeding the Zacks Consensus Estimate of $1.22 per share by 30.33% [3]. - In the previous quarter, the company was expected to earn $0.60 per share but delivered $0.75 per share, resulting in a 25% surprise [3]. Group 2: Earnings Estimates and Predictions - Recent changes in earnings estimates for Deckers have been favorable, with a positive Zacks Earnings ESP indicating potential for another earnings beat [4]. - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [5]. - Deckers currently has an Earnings ESP of +17.10%, suggesting increased analyst optimism regarding its near-term earnings potential [7]. Group 3: Importance of Earnings ESP - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [6]. - A positive Earnings ESP combined with a Zacks Rank 1 (Strong Buy) indicates a high likelihood of an earnings beat for Deckers [7]. - It is crucial for investors to check a company's Earnings ESP before quarterly releases to enhance the chances of successful investment decisions [8].

Core Viewpoint - Deckers (DECK) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changing earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Recent Performance and Projections - For the fiscal year ending March 2025, Deckers is projected to earn $5.53 per share, reflecting a 13.8% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Deckers has risen by 4.7%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Deckers to a Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for higher stock prices in the near term [10].

Core Viewpoint - Deckers is showing positive stock performance relative to the broader market, with a recent trading price of $207.25, reflecting a 1.32% increase, outperforming the S&P 500 and other indices [1] Financial Performance - The upcoming earnings report for Deckers is anticipated to show an EPS of $2.44, which is a 3.17% decrease from the same quarter last year, while quarterly revenue is expected to reach $1.69 billion, marking an 8.13% increase year-over-year [2] - For the entire fiscal year, earnings are projected at $5.49 per share and revenue at $4.87 billion, indicating increases of 12.96% and 13.64% respectively compared to the previous year [3] Analyst Estimates - Recent changes in analyst estimates for Deckers reflect positive sentiment regarding the company's business operations and profit generation capabilities [4] - The Zacks Rank system, which incorporates these estimate changes, currently ranks Deckers as 2 (Buy), indicating a favorable outlook [6] Valuation Metrics - Deckers is currently trading at a Forward P/E ratio of 37.26, significantly higher than the industry average of 17.03, suggesting a premium valuation [7] - The company's PEG ratio stands at 2.87, compared to the Retail - Apparel and Shoes industry average of 1.52, indicating that Deckers is expected to grow at a slower rate relative to its valuation [8] Industry Context - The Retail - Apparel and Shoes industry is positioned in the top 35% of all industries according to the Zacks Industry Rank, which suggests a favorable environment for companies within this sector [8] - Research indicates that industries rated in the top 50% outperform those in the bottom half by a factor of 2 to 1, highlighting the potential for investment opportunities in well-ranked sectors [9]

Core Insights - Deckers Outdoor Corporation (DECK) is experiencing strong upward momentum, trading above its 50 and 200-day simple moving averages, indicating price stability and long-term bullish trends [1][2]. Stock Performance - DECK closed at $207.11, above its 50-day SMA of $184.79 and 200-day SMA of $161.58, reflecting a continued uptrend and positive market sentiment [2]. - The stock is currently 3.5% below its 52-week high of $214.70, achieved on December 20, 2024, with a 33.1% increase in the past three months compared to the Zacks Retail-Apparel and Shoes industry's 13.2% growth [5][6]. Operational Efficiency and Growth - Deckers has enhanced operational efficiency and growth initiatives, outperforming the broader Retail-Wholesale sector and the S&P 500 index, which grew by 7.2% and 5.2% respectively during the same period [6]. Brand Performance - The company's core brands, UGG and HOKA, are central to its success, with HOKA projected to become a multi-billion-dollar brand. In Q2 of fiscal 2025, HOKA sales increased by 34.7%, while UGG saw a 13% growth [9][10]. - Year-over-year increases in net sales for HOKA and UGG are anticipated at 24% and 5.4% respectively for fiscal 2025 [10]. Direct-to-Consumer (DTC) Business - The DTC business contributed significantly, with net sales rising 19.9% to $397.7 million and comparable net sales increasing by 17%. DTC revenues are expected to grow by 12.6% in fiscal 2025 [11]. Wholesale Channel Success - Wholesale revenues surged 20.2% year over year, reaching $913.7 million, driven by strong performances from HOKA and UGG, with wholesale revenues rising 33% and 14% respectively [12][13]. International Expansion - International sales jumped 33% year over year, supported by strategic investments in new stores and retail locations, with expected revenue growth of 15.5% in fiscal 2025 [14][15]. Financial Outlook - Total revenues for fiscal 2025 are projected at $4.8 billion, a 12% increase from the previous year, with HOKA expected to achieve 24% growth and UGG mid-single-digit growth [16]. - The gross margin outlook has been revised to 55-55.5%, and EPS guidance has been raised to $5.15-$5.25, reflecting improved profitability from $4.86 in the prior year [17]. Analyst Sentiment - Analysts have positively revised the Zacks Consensus Estimate for EPS, with current fiscal year estimates increased by one penny to $5.49 per share, and next fiscal year's estimate raised to $6.22 per share [18][19].

Core Insights - Deckers Outdoor Corp (DECK) has shown strong stock performance with an 87.4% lead for 2024 and is on track for its fourth gain in the last five sessions [4] - The stock recently reached an all-time high of $214.70, supported by the 20-day moving average, indicating potential for further record peaks [4] - The stock's Schaeffer's Volatility Scorecard (SVS) is at 95 out of 100, suggesting it has consistently outperformed volatility expectations over the past year [1] Volatility and Price Movement - The stock's recent high coincides with historically low implied volatility (IV), which has historically generated positive momentum [2] - Data indicates that one month after similar signals, the stock was higher 80% of the time, averaging a 5.7% gain [3] - Currently priced at $208.70, a similar upward movement could push DECK to a new record high of $220.59 [3] Analyst Sentiment - Among analysts covering the stock, nine have rated it as a "hold," while the 12-month consensus target price is $202.15, representing a 3% discount to current levels [3]

Group 1 - The average brokerage recommendation (ABR) for Deckers (DECK) is 2.00, indicating a "Buy" on a scale from 1 (Strong Buy) to 5 (Strong Sell) based on recommendations from 20 brokerage firms [10] - There are nine "Strong Buy" and two "Buy" recommendations, which account for 45% and 10% of all recommendations respectively [2] - Analysts are increasingly optimistic about Deckers' earnings prospects, as indicated by a consensus revision of EPS estimates higher, suggesting potential for stock price increase in the near term [8] Group 2 - The Zacks Consensus Estimate for Deckers has increased by 0.1% over the past month to $5.49, contributing to a Zacks Rank 2 (Buy) for the company [17][18] - The Zacks Rank is a quantitative model that reflects earnings estimate revisions and is considered more timely in predicting future stock prices compared to the ABR [15][16] - The ABR may not always be up-to-date, while the Zacks Rank quickly incorporates changes in earnings estimates, making it a more reliable indicator for investors [16]

Core Viewpoint - Deckers Outdoor Corporation (DECK) has demonstrated strong performance in the footwear market, significantly outperforming industry benchmarks and showing robust growth in both direct-to-consumer and wholesale channels [1][2][19]. Financial Performance - DECK shares are currently trading at $206.63, just 0.9% below its 52-week high of $208.45, with a 75.4% increase in stock value over the past year compared to the Zacks Retail-Apparel and Shoes industry's 36% growth [1][4]. - In the second quarter of fiscal 2025, DECK's net sales rose 19.9% to $397.7 million, with comparable net sales increasing by 17% [9]. - Total revenues for fiscal 2025 are estimated at $4.8 billion, reflecting a 12% increase from the previous year, with HOKA expected to grow by 24% and UGG projected for mid-single-digit growth [14]. Brand Performance - HOKA achieved a remarkable 34.7% sales increase in the second quarter, while UGG grew by 13%, driven by a diversified product portfolio and optimized distribution strategies [8][7]. - The company's flagship brands, UGG and HOKA, are positioned for continued growth, with HOKA on track to become a multi-billion-dollar brand [7]. Market Position and Strategy - Deckers has strengthened its market position through innovation and a focus on direct-to-consumer operations, enhancing its digital capabilities and omnichannel presence [7][9]. - International sales surged 33% year over year in the fiscal second quarter, indicating strong performances from UGG and HOKA in global markets [10][11]. - Wholesale revenues increased by 20.2% year over year to $913.7 million, with HOKA and UGG contributing significantly to this growth [12][13]. Outlook and Analyst Sentiment - Analysts have positively revised their earnings estimates for DECK, with the consensus estimate for the current fiscal year pegged at $5.48 per share and $6.21 for the next fiscal year [16][17]. - The company has raised its gross margin outlook to 55-55.5% and increased its earnings per share guidance to $5.15-$5.25, indicating improved profitability [15].