Deckers (DECK) Soars After Delivering a Blowout Quarter, Analysts Raise PTs as 'More to Come'

Shares of Deckers Brands (NYSE: DECK) are up 6% in pre-open trading Friday after the company delivered stronger-than-expected Q4 results.

The company made $33.5 million in the quarter, or $1.18 per share, beating analysts' expectations of 58 cents per share. Revenue came in at $561.2 million in Q4, also above analysts’ forecast of $438.1 million.

For the full fiscal year, Deckers reported a profit of $382.6 million, or $13.47 per share on revenue of $2.55 billion. The footwear designer said it expects full-year earnings to land between $14.05 and $14.65 per share, with revenue in the range of $2.95 billion to $3 billion.

"Fiscal 2021 was an exceptional year for Deckers, led by global growth of the HOKA brand, and broad-based demand for the head-to-toe assortment of UGG brand products," said Dave Powers, President and Chief Executive Officer.

"While our fourth quarter benefited from certain macro tailwinds as well as lapping last year's disruption, the health of our brands, strength of our omni-channel organization, and our digitally focused long-term strategies provided the foundation for success over the past year, accelerating our growth trajectory. We are excited for the year ahead as we invest in the long-term evolution of Deckers to drive sustainable top and bottom line growth."

BofA analyst Rafe Jadrosich raised its price target by more than 10% to $425.00 per share on the Buy-rated DECK. He argues that the double-digit revenue growth appears sustainable longer term.

“We believe DECK’s reinvestment in supply chain, marketing and international will support more sustainable double-digit top-line momentum longer term. DECK also authorized an additional $750mm share repurchase (8% of shares at current stock price),” the analyst said in a memo.

“We believe DECK has significant EPS growth opportunity due to rapidly rising HOKA brand awareness, modest share gains from UGG, and share repurchases.”

BTIG analyst Camilo Lyon raised the price target to $447.00 per share as Q4 results are seen as “the exclamation point on a Breakout Year for UGG and HOKA.” The analyst sees more to come in 2022 as Q4 was “nothing short of outstanding.”

“With this growth and EBIT margins that can comfortably stay in the high teens, cash generation should meaningfully increase (DECK ended FQ4 with $1B in cash, and we're projecting ~$1.5B this year). As such, the company has increased its buyback authorization by $750M (not included in guidance). With UGG successfully expanding into apparel in a more meaningful way at the same time that Europe is showing signs of returning to growth, UGG is becoming a more credible, well-rounded global lifestyle brand. Similarly, we estimate HOKA will eclipse the $1B revenue mark in F23 boosted by investments in brand/infrastructure building in China this year helping lay the foundation for its global growth. Taken together, DECK's momentum is not showing any signs of slowing,” the analyst wrote in a note.

Shares of Deckers are up 8.5% year-to-date and have surged 92% over the past 12 months.

You May Also Be Interested In

• SLM (SLM) Tops Q1 EPS by 20c; offers guidance
• Goldman Sachs on Meta Platforms Inc. (META): 'We expect investors to have an initial negative reaction'
• ESSA Bancorp (ESSA) Tops Q2 EPS by 13c