Deckers (DECK) Shares Gain as Revenue Easily Tops Estimates, Analysts Positive

May 20, 2022 7:43 AM EDT
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Price: $273.32 +4.77%

Rating Summary:
    22 Buy, 15 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 8 | Down: 12 | New: 20
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Shares of Deckers (NYSE: DECK) are up 13% in premarket trading after the company reported better-than-expected Q4 net sales.

DECK generated $736 million in net sales in the fourth quarter, up 31% YoY and above the analyst consensus of $639.1 million. Deckers reported Q4 EPS of $2.51, up from $1.18 in the same period last year.

The gross margin stood at 48.7%, compared to 53.2% in the year-ago period and the consensus estimates of 50.3%.

For FY2023, Deckers expects EPS in the range of $17.40 to $18.25, while analysts were looking for $18.21 per share. Net sales are expected to range between $3.45 billion and $3.50, compared to the expected $3.45 billion.

DECK expects an FY gross margin of around 51.5%, compared to the estimated 52.4%. It estimates FY operating margin in the range of 17.5% to 18%.

“Despite facing significant incremental costs related to supply chain disruption, our teams were able to nimbly respond to these changing market dynamics to manage costs and deliver an operating margin of 17.9% in fiscal year 2022, at the top end of our original guidance range,” the company said.

BTIG analyst Camilio Lyon reiterated a Buy rating and a $487.00 per share price target after “impressive” results.

“The company guided to +50bps of gross margin expansion for the year, which includes freight headwinds in 1H (continued use of air freight on HOKA and significantly higher ocean rates vs. last year), however this could prove conservative as DECK benefits from 6%-8% price increases across the portfolio and a reduction in air freight on UGG (~$30M benefit, by our math),” the analyst commented.

Cowen analyst John Kernan hiked the price target to $407.00 per share from $358.00 after seeing “big Q4 upside.

“The stock has some of the best risk/reward in the entire Softlines space as management's execution is far in excess of peers in the sector and guidance could prove conservative. We can model $30+ in EPS by FY26 and a FY23 bull case of $500 in stock price,” Kernan said in a note.

By Senad Karaahmetovic

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