Due to Weakness Deckers' (DECK) UGGs Showing Up at "Schlocky Retailer" - Analyst
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Price: $52.49 +0.02%
Rating Summary:
8 Buy, 13 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Rating Summary:
8 Buy, 13 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
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Negative data points keep showing up for Deckers Outdoor's (NASDAQ: DECK) UGG brands and Sterne Agee's Sam Poser is quick to point them out.
Today, the analyst noted that NPD data illuminate weakness and their channel checks indicate other pressures.
"The implied UGG sales for July and August combined were down just under 30%, with August ~1000bps less worse than July," he notes. "However, both months were down big double digits. Based on our channel checks we believe that Nordstrom's (JWN) UGG sales were down in line, if not worse than the reported NPD numbers. The NPD data infer that distribution and/or assortments of UGG product has increased in more moderate channels of distribution which is not good for the long-term health of the UGG brand."
The analyst also noted that distribution is "getting ugly," with six-store independent chain and an authorized UGG dealer "City Streets" getting UGGs. In the past these would have been "unacceptable points of distribution for the UGG brand," Poser notes. "We are at a loss as to why DECK would choose to sell to a schlocky retailer such as City Streets," he said.
Poser cut his price target from $38 to $32 while maintaining his Underperform rating. He also cut '12/'13 GAAP EPS estimates from $3.97/$4.37 to $3.49/$3.6
For an analyst ratings summary and ratings history on Deckers Outdoor click here. For more ratings news on Deckers Outdoor click here.
Shares of Deckers Outdoor closed at $37.51 yesterday, with a 52 week range of $37.00-$118.90.
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Today, the analyst noted that NPD data illuminate weakness and their channel checks indicate other pressures.
"The implied UGG sales for July and August combined were down just under 30%, with August ~1000bps less worse than July," he notes. "However, both months were down big double digits. Based on our channel checks we believe that Nordstrom's (JWN) UGG sales were down in line, if not worse than the reported NPD numbers. The NPD data infer that distribution and/or assortments of UGG product has increased in more moderate channels of distribution which is not good for the long-term health of the UGG brand."
The analyst also noted that distribution is "getting ugly," with six-store independent chain and an authorized UGG dealer "City Streets" getting UGGs. In the past these would have been "unacceptable points of distribution for the UGG brand," Poser notes. "We are at a loss as to why DECK would choose to sell to a schlocky retailer such as City Streets," he said.
Poser cut his price target from $38 to $32 while maintaining his Underperform rating. He also cut '12/'13 GAAP EPS estimates from $3.97/$4.37 to $3.49/$3.6
For an analyst ratings summary and ratings history on Deckers Outdoor click here. For more ratings news on Deckers Outdoor click here.
Shares of Deckers Outdoor closed at $37.51 yesterday, with a 52 week range of $37.00-$118.90.
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