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Deckers Outdoor (DECK) Making Headway, Reiterate 'Buy' Rating - Sterne Agee

August 5, 2013 7:24 AM EDT
Get Alerts DECK Hot Sheet
Price: $937.90 --0%

Rating Summary:
    25 Buy, 15 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 10 | New: 10
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Sterne Agee analyst Sam Poser reiterated a Buy rating and $68 price target on Deckers Outdoor (NASDAQ: DECK) Monday following meetings with management and others at the Outdoor Retailer (OR) trade show in Salt Lake City last week.

Following the meetings the analyst is more confident that the company is making headway and returning to growth.

"Sanuk, Ahnu, and Hoka will all likely have strong double-digit increases in 2014, Teva will likely be flat, and UGG will likely have profitable growth," Poser said.

The analyst believes the UGG story is showing promise after reviewed the spring '14 UGG collection and discussing the inventory position with Zohar Ziv. Some takeaways include: "1) There are some new offerings including a $140 driving moc, a $110 espadrille, and a $230 side-zip leather boot that should drive improved sales, though we do wish that each item was $10-$20 less expensive. 2) ~50% of the spring '14 offerings will be primarily sold in UGG retail stores in order to broaden the reach of the brand. In our view the offerings for spring '14 are improving, but it is the fall '14 assortment, which will not be seen until later this year, that will fully tell the story. 3) Based on our checks, we believe that sheep skin prices will be down ~10% in 2014, and if the fall '14 offerings are compelling, then UGG Pure could add ~$0.50 to current EPS estimates."

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 $57.80 yesterday.


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Sterne Agee