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Category: Deckers Brands (DECK) and Buckle (BKE)
Date: 6 July 2020 Stock price of Deckers (DECK): $194.20 Stock price of Buckle (BKE): $16.05 Battle of the clothing and accessories firms. We take a look at Deckers Brands (DECK) and Buckle (BKE) stock performance over the last couple of years and look at which stock offers the best prospects for future growth based on their current financial position and their current stock price.
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So if one had to buy one of these two clothing and accessories stocks now which one is the better buy? Does the stock of Buckle provide a greater buying opportunity because it declined significantly while the stock of Deckers Brands surged over the same time period? Or is there a fundamental reason why the stock of Buckle struggled so much while the stock of Deckers exceled? "
More About Deckers Brands (DECK)
Deckers Brands is a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories developed for both everyday casual lifestyle use and high-performance activities. The Company's portfolio of brands includes UGG®, Koolaburra®, HOKA ONE ONE®, Teva®, and Sanuk®. Deckers Brands products are sold in more than 50 countries and territories through select department and specialty stores, Company-owned and operated retail stores, and select online stores, including Company-owned websites. Deckers Brands has over 40 years of history building niche footwear brands into lifestyle market leaders attracting millions of loyal consumers globally
Overview of Deckers Brands latest earnings report:
Overview of Deckers Brands latest earnings report:
- Net sales: $374.910 million (down from $394.130 million for the same quarter of the previous year)
- Net sales decreased by -4.8% over the last 12 months
- Cost of sales: $181.912 million (down from $190.825 million for the same quarter of the previous year)
- Cost of revenue decreased by -4.7% over the last 12 months
- Slight margin improvement for Deckers Brands with cost of sales increasing less than their net sales
- Net income: $16.090 million (down from $23.969 million for the same quarter of the previous year)
- Diluted earnings per share: $0.57 (down from $0.82 for the same quarter of the previous year)
- PE ratio of Deckers Brands: 18.60
- Diluted weighted-average shares outstanding: 28.279 million (down from 29.407 million for the same quarter of the previous year)
- Cash and cash equivalents: $649.436 million
- Cash and cash equivalents per share: $22.96
- Cash and cash equivalents makes up 12.8% of Deckers Brands market capital
- Cash and cash equivalents makes up 36.8% of Deckers Brands s total assets
- Cash and cash equivalents per share: $22.96
- Trade receivable: $185.596 million
- Accounts receivable makes up 10.5% of Deckers Brands total assets
- Inventories of Deckers Brands: $311.620 million
- Inventories makes up 17.7% of Deckers Brands total assets
- Stockholders equity of Deckers Brands: $1.140 billion
- Stockholders equity per share: $40.31
- So Deckers Brands is trading at 4.44 times its stockholders equity which is well outside the expected range of between 2 and 4 times that most firms tend to trade at.
- Stockholders equity per share: $40.31
More About Buckle Inc (BKE)
Offering a unique mix of high-quality, on-trend apparel, accessories, and footwear, Buckle caters to fashion-conscious young men and women. Known as a denim destination, each store carries a wide selection of fits, styles, and finishes from leading denim brands, including the Company’s exclusive brand, BKE. Headquartered in Kearney, Nebraska, Buckle currently operates 449 retail stores in 42 states. As of the end of the fiscal quarter, it operated 449 stores in 42 states compared with 453 stores in 43 states at the end of the third quarter of fiscal 2018.
Overview of Buckle's latest earnings report
Overview of Buckle's latest earnings report
- Net sales: $115.413 million (down from $201.313 million for the same quarter of the prior year)
- Net sales decreased by -42.6% over the last 12 months
- Cost of sales : $88.588 million (down from $124.660 million for the same quarter of the prior year)
- Cost of sales expenses decreased by -28.9% over the last 12 months
- So margin squeeze being experienced by Buckle as revenue fell at a rate a lot faster than their cost of sales, which is bad for both gross and net profit margins.
- Net loss: -$11.784 million (down from $15.092 million for the same quarter of the prior year)
- Diluted loss per share: -$0.24 (down from $0.31 for the same quarter of the prior year)
- Shares outstanding : 48.922 million (up from 48.734 million for the same quarter of the prior year)
- Cash and cash equivalents: $185.037 million
- Cash and cash equivalents per share: $3.78
- Cash and cash equivalents makes up 23.9% of Buckle's market capital
- Cash and cash equivalents makes up 23.1% of Buckle's total assets
- Cash and cash equivalents per share: $3.78
- Merchandise inventories: $121.671 million
- Merchandise inventories makes up 15.2% of Buckle's total assets
- Stockholders equity in Buckle: $377.949 million
- Stockholders equity per Buckle stock: $7.72
- Buckle is trading at 2.03 times its stockholders equity per share which is just within the expected range of between 2 and 4 times that most firms tend to trade at
- Stockholders equity per Buckle stock: $7.72
Deckers Brands (DECK) stock vs Buckle (BKE) stock
The image below shows the stock price performance of Deckers Brands (DECK) and Buckle (BKE) over the last 3 years. Both these firms are active in the clothing and accessories sector but their stock price trends are totally different. Over the 3 year period Deckers stock increased by 174.6% while the stock of Buckle (BKE) declined by a whopping -62.5%
So does the stock of Buckle provide a greater buying opportunity because it has decline significantly over the three year period while the stock of Deckers increased strongly over the same three year period or is there a fundamental financial reason why the stock of Buckle has declined so much while so much while the stock of Deckers increased significantly
So does the stock of Buckle provide a greater buying opportunity because it has decline significantly over the three year period while the stock of Deckers increased strongly over the same three year period or is there a fundamental financial reason why the stock of Buckle has declined so much while so much while the stock of Deckers increased significantly
So if one had to buy one of these two clothing and accessories stocks now which one is the better buy? Does the stock of Buckle provide a greater buying opportunity because it declined significantly while the stock of Deckers Brands surged over the same time period? Or is there a fundamental reason why the stock of Buckle struggled so much while the stock of Deckers exceled?
One of our key metrics is the Price to Stockholders equity per share ratio. When looking at this we find the following for both stocks:
Based on this metric Buckle offers far more value than Deckers Brands. Most firms tend to trade at a ratio of between 2 and 4 times. Deckers is trading at well above the expected range and Buckle is trading at inside the expected range.
Next up cash as percentage of stock price. Cash per share makes up just over 12% of Deckers Brands stock price while Buckle's cash makes up 23.9% of their stock price. Total cash as percentage of total assets is as follows.
Cash makes up 36.8% of Deckers Brands' total assets while Buckle's cash makes up around 23.1% of their total assets. So it does look like Deckers Brands is better placed to ride out difficult times as is currently being experienced during Covid-19 as their cash as percentage of total assets is far greater than that of Buckle and they would therefore be far less likely to borrow money to keep their operations afloat during the Covid-19 pandemic.
Taking all of the above into consideration, the fact that Buckle was loss making during their last quarter while Deckers remained profitable gives Deckers the lead. Deckers is trading with what looks like a far stronger balance sheet considering the cash as a percentage of their total assets. Which gives Deckers Brands an even bigger lead. But Deckers Brands is however trading at a far higher Price/Stockholders equity per share ratio while Buckle's Price/Stockholders equity per share ratio is less than half that of Deckers. All of these things considered we rate the stock of Deckers Brands as the WINNER in the battle between Deckers Brands (DECK) and Buckle Inc (BKE)
- Price/Stockholders equity per share for Deckers Brands: 4.8
- Price/Stockholders equity per share for Buckle Inc: 2.1
Based on this metric Buckle offers far more value than Deckers Brands. Most firms tend to trade at a ratio of between 2 and 4 times. Deckers is trading at well above the expected range and Buckle is trading at inside the expected range.
Next up cash as percentage of stock price. Cash per share makes up just over 12% of Deckers Brands stock price while Buckle's cash makes up 23.9% of their stock price. Total cash as percentage of total assets is as follows.
Cash makes up 36.8% of Deckers Brands' total assets while Buckle's cash makes up around 23.1% of their total assets. So it does look like Deckers Brands is better placed to ride out difficult times as is currently being experienced during Covid-19 as their cash as percentage of total assets is far greater than that of Buckle and they would therefore be far less likely to borrow money to keep their operations afloat during the Covid-19 pandemic.
Taking all of the above into consideration, the fact that Buckle was loss making during their last quarter while Deckers remained profitable gives Deckers the lead. Deckers is trading with what looks like a far stronger balance sheet considering the cash as a percentage of their total assets. Which gives Deckers Brands an even bigger lead. But Deckers Brands is however trading at a far higher Price/Stockholders equity per share ratio while Buckle's Price/Stockholders equity per share ratio is less than half that of Deckers. All of these things considered we rate the stock of Deckers Brands as the WINNER in the battle between Deckers Brands (DECK) and Buckle Inc (BKE)