Deckers (DECK) Crafts 52-Week High On Strategic Initiatives

Shares of Deckers Outdoor Corporation (NYSE:DECK) scaled a 52-week high of $122.98 on Jun 21, closing a tad lower at $121.94. Notably, the company’s shares have rallied 18.6% in the past month, outperforming the industry's growth of 6.1%. It is targeting profitable and underpenetrated markets, and remains focused on product innovations, store expansion and enhancing its e-commerce capabilities.

Deckers’ focus on targeting consumers digitally and optimizing its omni-channel distribution bodes well. In line with the changing trends, the company has been constantly developing its e-commerce portal to bolster sales. It has made substantial investments to strengthen its online presence and improve shopping experience.

This Zacks Rank #1 (Strong Buy) company is focused on opening smaller concept omni-channel outlets and expanding programs, such as Retail Inventory Online, Infinite UGG, Buy Online, Return In Store, and Click and Collect, to enhance customers’ shopping experience.

Deckers Outdoor Corporation Price and Consensus

Apart from these, management’s long-term target has instilled confidence in the stock. Management had earlier informed that it expects total sales of about $2 billion, with an operating margin of 13%, by fiscal 2020.

For fiscal 2019, management now anticipates net sales in the band of $1,925-$1,950 million, reflecting year-over-year growth of about 2%. Further, adjusted earnings are projected at $6.20-$6.40 per share, up from $5.74 reported in fiscal 2018. Gross margin for the fiscal is anticipated to be marginally better than 49%. Operating margin is envisioned to be in the range of 12.6-12.8% during fiscal 2019 compared with 12.4% reported in prior fiscal.

As part of the company’s store-fleet optimization plan, Deckers had earlier discussed plans to close approximately 30 to 40 outlets over the next two years. By fiscal 2020, Deckers expects company-owned fleet of approximately 125 stores worldwide. These actions are likely to boost profits and shareholders’ return, as well as enhance brand and store performance. Moreover, management expects cost savings of about $150 million on the back of improvement in cost of goods sold and SG&A savings.

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