Canaccord Slightly Raises Price Target On Deckers Outdoor Following Solid FQ1 Results


In a research report issued today, Canaccord analyst Camilo Lyon reiterated a Buy rating on shares of Deckers Outdoor (DECK) and raised his price target to $106 (from $103), following DECK’s first fiscal quarter results.

Lyon commented: “DECK reported solid FQ1 results with sales +24.3% vs. our 12.3% estimate driving EPS of -$1.07 vs. our/consensus -$1.29/-$1.28 estimates. Sales upside was driven by both higher UGG sales and a favorable timing shift to international distributor partners. Gross margin of 41% (flat y/y) was right in line with our estimate. As we previewed, we did not expect this to be a gross margin expansion quarter largely because the benefits from UGG Pure and UGG retail coincide with the seasonal sales ramp in FQ2/3. As we anticipated, full year guidance was increased with sales growth now expected to be +14% vs. 13% previously and EPS growth of 14.5% vs. 13.5% previously. We continue to believe this is highly conservative guidance, largely due to the strength of the backlog (+19%) that suggests higher annual wholesale growth vs. the implied LDD growth. Overall, we believe the company is well positioned to leverage its improved fall/winter UGG product assortment to drive incremental growth in excess of its stated guidance”.

According to TipRanks.com, which measures analysts and bloggers success rate based on how their calls perform, analyst Camilo Lyon has a 7.4% average return and a 55% success rate. Lyon has a -9.1% average return when recommending DECK, and is ranked #556 out of 3222 analysts.

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