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Deckers (NYSE:DECK) Surprises With Q3 Sales, Stock Soars

Updated: 24-10-2024, 09.05 PM

Footwear and apparel conglomerate Deckers (NYSE:DECK) reported Q3 CY2024 results beating Wall Street’s revenue expectations , with sales up 20.1% year on year to $1.31 billion. The company expects the full year’s revenue to be around $4.8 billion, close to analysts’ estimates. Its GAAP profit of $1.59 per share was also 28.2% above analysts’ consensus estimates.

Is now the time to buy Deckers? Find out in our full research report.

  • Revenue: $1.31 billion vs analyst estimates of $1.20 billion (9% beat)

  • EPS: $1.59 vs analyst estimates of $1.24 (28.2% beat)

  • The company lifted its revenue guidance for the full year to $4.8 billion at the midpoint from $4.7 billion, a 2.1% increase

  • The company also lifted its EPS guidance for the full year (accounting for the stock split)

  • Gross Margin (GAAP): 55.9%, up from 53.4% in the same quarter last year

  • Operating Margin: 23.3%, up from 20.6% in the same quarter last year

  • Constant Currency Revenue rose 20.4% year on year(compared to 24.2% in the same quarter last year)

  • Market Capitalization: $23.02 billion

“HOKA and UGG produced outstanding second quarter results driven by strong consumer demand for our innovative and unique products,” said Stefano Caroti, President and Chief Executive Officer.

Established in 1973, Deckers (NYSE:DECK) is a footwear and apparel conglomerate with a portfolio of lifestyle and performance brands.

Before the advent of the internet, styles changed, but consumers mainly bought shoes by visiting local brick-and-mortar shoe, department, and specialty stores. Today, not only do styles change more frequently as fads travel through social media and the internet but consumers are also shifting the way they buy their goods, favoring omnichannel and e-commerce experiences. Some footwear companies have made concerted efforts to adapt while those who are slower to move may fall behind.

A company’s long-term performance can give signals about its business quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, Deckers’s sales grew at a decent 17.4% compounded annual growth rate over the last five years. This shows it was successful in expanding, a useful starting point for our analysis.

Deckers Total Revenue
Deckers Total Revenue

Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Deckers’s annualized revenue growth of 16.8% over the last two years aligns with its five-year trend, suggesting its demand was stable.

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