Deckers Brands Q2 Results Miss Estimates; Issues Guidance

Deckers Outdoor (DECK) delivered Fiscal Q2 2022 results that fell short of Wall Street expectations. Revenue and earnings missed estimates as the company had to contend with supply-chain challenges. Management has updated the financial outlook for the full fiscal year 2022. DECK shares rose 1.07% to close at $380.35 on October 28.

Deckers Outdoor designs, manufacture, and sells innovative footwear, apparel, and accessories worldwide. It offers products for both casual lifestyle use and high-performance activities.

Net sales were up 15.8% year-over-year to $721.9 million, missing consensus estimates of $765.91 million. Diluted EPS came in at $3.66 compared to $3.58 delivered in the same quarter last year. However, it missed consensus estimates of $4.01 a share.

During the quarter, Deckers Outdoor repurchased 133,000 shares of common stock for $53.8 million. The company had $674.7 million remaining under its stock repurchase authorization as of the end of Q2. (See Top Smart Score Stocks on TipRanks)

According to CEO Dave Powers, Deckers Outdoor registered first-half growth compared to the prior year, which affirms that the HOKA brand is gaining traction amid the UGG brand’s evolution. According to the executive, the company remains well-positioned to navigate the dynamic environment disrupted by supply-chain challenges.

Net sales for full-year Fiscal 2022 are expected to range between $3.01 billion and $3.06 billion, with a gross margin of 51.5%. Diluted EPS is expected to range between $14.15 and $15.15.

Meanwhile, Jefferies analyst Janie Stichter recently reiterated a Buy rating on the stock with a $475 price target, implying 24.88% upside potential to current levels. The Buy rating stems from Stella International, a key supplier, stating that Deckers’ factories operated normally during Q3 without any shutdowns.

Consensus among analysts is a Strong Buy based on 10 Buys and 2 Holds. The average Deckers Outdoor price target of $476.08 implies 25.17% upside potential to current levels.

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