Decker's Stock Surges Like NVIDIA Through $1,000 on Robust Growth

Key Points

• Deckers reported a blowout fiscal Q4 2024 EPS beat by $1.94 as revenues surged 21.2% YoY to $956.76 million vs $892 million consensus estimates.
• Direct-to-consumer (DTC) sales rose 21% YoY to nearly 40% of total sales, while Wholesale net sales surged 21.4% YoY to $544.6 million.
• Deckers' most popular brands, UGG sheepskin boots and shoes, and HOKA athletic and outdoor performance shoes stole the spotlight as consumer demand soared.

While artificial intelligence (AI) chip maker NVIDIA Co. NASDAQ: NVDA garnered the spotlight on its stock surge through $1,000, a retailer that gapped through the $1,000 barrier received less fanfare. The price action appears similar, but these companies are in completely different sectors: computer and technology and consumer discretionary.

Outdoor lifestyle apparel and footwear maker Deckers Outdoor Co. NYSE: DECK shares shot through $1,000 and all-time highs under the radar when it released its fiscal Q4 2024 earnings results. However, the company issued slightly lower guidance than consensus estimates, but shares continued to roar higher.

Deckers competes with outdoor apparel retailers, including Canadian Goose Holdings Inc. (NYSE: GOOS), Visto Outdoor Inc. NYSE: VSTO, V.F. Corp. NYSE: VFC, and Columbia Sportswear Co. NASDAQ: COLM.

Deckers' Brands Soar in Popularity: UGG, HOKA, Teva, AHNU, and Sanuk in High Demand

Deckers has several brands that consumers have an insatiable hunger for. Its UGG brand is known for its super comfortable and plush classic sheepskin boots, slippers, and sandals. HOKA makes athletic performance shoes for running and outdoor activities, focusing on maximum cushioning. Teva makes lifestyle sandals, shoes, and boots for outdoor activities and casual wear. AHNU makes high-performance walking shoes, and Sanuk footwear caters to the surfer lifestyle.

Deckers' Stock Breakout: Daily Ascending Triangle Pattern and Strong Q4 Earnings

Deckers triggered a daily ascending triangle breakout pattern. The ascending trendline formed at $788.37 on April 30, 2024, with higher lows on pullbacks. The flat-top resistance formed at $908.70. The fiscal Q4 2024 earnings release triggered a breakout, with shares surging to $994.50 and reaching new all-time highs. The daily relative strength index (RSI) surged to the oversold 80-band level. Pullback support levels are at $994.50, $956.17, $908.70, and $882.64.

Deckers reported fiscal Q4 2024 EPS of $4.95, crushing analyst estimates by $1.94. Revenues surged 21.2% year-over-year (YoY) to $959.80 million, beating $892 million consensus estimates. Its direct-to-consumer (DTC) sales surged 21% to $415.2 million. Gross margin was 56.2%, compared to 50% in the year-ago period. Operating income rose to $144.3 million, up from $105.9 million. Domestic net sales rose 19.4% YoY to $647.7 million, up from $542.4 million. International net sales rose 25.2% YoY to $312 million, up from $249.1 million.

Deckers' Financial Strength and Dual Channel Growth

The company bought back $104.3 million shares at an average price of $875.01. Deckers closed the quarter with $1.502 billion in cash and cash equivalents, up from $981.8 million in the year-ago period, and no outstanding borrowings. Inventories fell to $474.3 million compared to $532.9 million in the year-ago period.

DTC comparable net sales rose 20.5%. Wholesale net sales rose $21.4% YoY to $544.6 million, up from $448.4 million. Unlike many other retailers with growing DTC channels, Deckers had both DTC and Wholesale channels experience a revenue surge without cannibalizing the other.

Brand Performance Highlights: HOKA Leads, UGG Rises, Teva and Sanuk Decline

The HOKA brand generated the largest revenue, climbing 34% YoY to $544 million, which is up from $397.7 million a year ago. UGG brand net sales rose 14.9% to $361.3 million, up from $314.3 million. Teva sales fell 15.6% YoY to $53 million, pared to $62.8 million. Sanuk saw net sales fall 39.1% YoY to $6.5 million compared to $10.7 million. Other brands like Koolaburra's sales were flat, at around $6 million.

Scorching Hot Year for Deckers

Deckers fiscal full-year 2024 EPS rose 51% YoY to a record $29.16. Full-year revenues rose 19% YoY to a record $4.29 billion. DTC sales rose 26.5% to $1.855 billion, compared to the 25.4% increase last year at $1.467 billion. Wholesale net sales rose 12.6% YoY to $2.432 billion, up from $2.161 billion. Gross margin improved to 55.6% compared to 50.3% in the year-ago period. Deckers bought back $414.9 million of stock at a weighted average price of $580.44 per share in fiscal 2024.

Deckers Adjusts FY 2025 Guidance Following Record 2024 Results

Deckers issued fiscal full-year 2025 EPS guidance of $29.50 to $30.00, compared to $30.47 consensus analyst estimates. Fiscal full-year 2025 revenues are expected to be around $4.70 billion, compared to $4.71 billion consensus estimates.

Deckers CEO Dave Powers commented, "Deckers achieved record results during fiscal year 2024, as we delivered revenue growth of 18% and increased earnings per share by 51%, reflecting a continued dedication to maintain exceptional levels of profitability as our brands scale. HOKA and UGG remain two of the most admired and well-positioned brands in the marketplace, each with a robust innovation product pipeline designed to win with global consumers.”

Decker's analyst ratings and price targets are on MarketBeat.