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Category: Stock Market and Decker Brands
Date: 3 February 2020 Stock Price: $187.85 We take a look at the 3rd quarter earnings report of their 2020 fiscal year of Deckers Brands, a leading designer, marketer and distributor of innovative footwear, apparel and accessories for everyday casual and high-performance activities.
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About Deckers Brands
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 3rd quarter 2020 earnings report
- Net sales: $938.735 illion (up from $873.800 million for the same quarter of the previous year)
- Net sales increased by 7.4% over the last 12 months
- Cost of sales: $431.103 million (up from $403.707 million for the same quarter of the previous year)
- Cost of revenue decreased by 6.7% over the last 12 months
- Slight margin improvement for Deckers Brands with cost of sales increasing less than their net sales
- Net income: $201.593 million (up from $196.374 million for the same quarter of the previous year)
- Diluted earnings per share: $7.14 (up from $6.68 for the same quarter of the previous year)
- PE ratio of Deckers Brands: 15.4
- Diluted weighted-average shares outstanding: 28.249 million (down from 29.397 million for the same quarter of the previous year)
- Cash and cash equivalents: $616.864 million
- Cash and cash equivalents per share: $21.83
- Cash and cash equivalents makes up 11.6% of Deckers Brands market capital
- Cash and cash equivalents makes up 32.6% of Deckers Brands s total assets
- Trade receivable: $286.891 million
- Accounts receivable makes up 15.19% of Deckers Brands total assets
- Inventories of Deckers Brands: $365.946 million
- Inventories makes up 19.78% of Deckers Brands total assets
- Stockholders equity of Deckers Brands: $1.123 billion
- Stockholders equity per share: $39.75
- So Deckers Brands is trading at 4.72 times its stockholders equity which is well outside the expected range of between 2 and 4 times that most firms tend to trade at.
Deckers Brands management commentary on their 3rd quarter 2020 earnings report
GOLETA, Calif., Jan. 30, 2020 /PRNewswire/ -- Deckers Brands (NYSE: DECK), a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories, today announced financial results for the third fiscal quarter ended December 31, 2019. The Company also provided its financial outlook for the fourth fiscal quarter ending March 31, 2020 and raised its outlook for the full fiscal year ending March 31, 2020.
"Our third quarter results were driven by three of our brands experiencing record levels of quarterly revenue, resulting in an updated outlook that reflects another year of strong top-line growth and earnings expansion," said Dave Powers, President and Chief Executive Officer. "Heading into the fourth quarter, our brands are intent on maintaining the momentum seen throughout this fiscal year as we are planning continued investment in consumer engagement opportunities and compelling product introductions."
Stock Repurchase Program
During the third quarter, the Company did not repurchase any shares of its common stock. As of December 31, 2019, the Company had $160 million remaining under its stock repurchase authorizations.
Full Year Fiscal 2020 Outlook for the Twelve Month Period Ending March 31, 2020
Stock Repurchase Program
During the third quarter, the Company did not repurchase any shares of its common stock. As of December 31, 2019, the Company had $160 million remaining under its stock repurchase authorizations.
Full Year Fiscal 2020 Outlook for the Twelve Month Period Ending March 31, 2020
- Net sales are now expected to be in the range of $2.150 billion to $2.160 billion.
- Gross margin is now expected to be approximately 51.5%.
- SG&A expenses as a percentage of sales are projected to be slightly lower than 36.0%.
- Operating margin is now expected to be at or slightly better than 15.5%.
- Effective tax rate expected to be approximately 20.5%.
- Diluted earnings per share now expected to be in the range of $9.40 to $9.50.
- The earnings per share guidance excludes any impact from additional share repurchases.
Deckers Brands (NYSE: DECK) stock price history
The image below, obtained from Google, shows the stock price history of Deckers Brands over the last 5 years. And it's been a pretty good time for Deckers Brands stockholders. 5 years ago it was trading at $72.90 and its currently trading at around $187.85 a stock. That's a very strong return of 157.7% provided to Deckers Brands stockholders over the last 5 years.
The stock of Deckers Brands is trading at a lot closer to its 52 week high of $199.31 and far away from its 52 week low of $130.19 a stock, which to us is a clear indication that the short term sentiment and momentum of Deckers Brands stock is very positive at this point in time.
The stock of Deckers Brands is trading at a lot closer to its 52 week high of $199.31 and far away from its 52 week low of $130.19 a stock, which to us is a clear indication that the short term sentiment and momentum of Deckers Brands stock is very positive at this point in time.
Recent coverage of Deckers Brands
The extract below discusses the latest on Illinois Tool Works (NYSE: ITW) as obtained from Fool.com
What happened
Shares of Deckers Outdoor (NYSE:DECK) were climbing today after the Ugg maker turned in a better-than-expected third-quarter earnings report and raised its full-year guidance. The stock finished the session up 7.6% after trading up as much as 12.4% earlier in the day.
So what
For the quarter, Deckers' sales rose 7.4% to $938.7 million, breezing past expectations of $900.4 million. The footwear specialist said Ugg sales rose 2.6% to $781.1 million, but the real standout was its Hoka One One running shoe brand, which saw sales jump 63.6% to $93.1 million, showing the company may have another breakout brand on its hands. Growth at Koolaburra, a sub-brand of Ugg, was also impressive, rising 94% to $39 million. At two of Deckers' smaller brands, Teva and Sanuk, sales declined in the quarter.
Read the full article here
What happened
Shares of Deckers Outdoor (NYSE:DECK) were climbing today after the Ugg maker turned in a better-than-expected third-quarter earnings report and raised its full-year guidance. The stock finished the session up 7.6% after trading up as much as 12.4% earlier in the day.
So what
For the quarter, Deckers' sales rose 7.4% to $938.7 million, breezing past expectations of $900.4 million. The footwear specialist said Ugg sales rose 2.6% to $781.1 million, but the real standout was its Hoka One One running shoe brand, which saw sales jump 63.6% to $93.1 million, showing the company may have another breakout brand on its hands. Growth at Koolaburra, a sub-brand of Ugg, was also impressive, rising 94% to $39 million. At two of Deckers' smaller brands, Teva and Sanuk, sales declined in the quarter.
Read the full article here
Deckers Brands (NYSE: DECK) latest stock valuation
So what is Deckers Brands stock worth based on the release of their latest earnings report and the fiscal guidance provided for Deckers Brands 2020 fiscal year? Based on Deckers Brands latest earnings and their fiscal guidance provided our valuation model provides a target price (full value price) at $151.20 per Deckers Brands stock. We therefore believe that the stock of Deckers Brands is overvalued.
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target (full value) price which in this case is $151.20 Therefore we see a good entry point into Deckers Brands stock at $136.10 or below.
We expect the stock of Deckers Brands to pull back from current levels in coming weeks and months to levels closer to our target price (full value price).
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target (full value) price which in this case is $151.20 Therefore we see a good entry point into Deckers Brands stock at $136.10 or below.
We expect the stock of Deckers Brands to pull back from current levels in coming weeks and months to levels closer to our target price (full value price).
Next earnings release of Deckers Brands
It is expected that Deckers Brands will release their 4th quarter 2020 earnings report in late April 2020