Deckers Outdoor (DECK) stock is trading near the top of the S&P 500 Friday after the footwear giant beat top- and bottom-line expectations for its fiscal second quarter and raised its full-year profit forecast.
In the three months ended September 30, Deckers' revenue increased 20.1% year over year to $1.3 billion, driven by 34.7% growth in its Hoka brand to $570.9 million. Its earnings per share (EPS) were up 39.5% from the year-ago period to $1.59.
The results handily beat analysts' expectations. Wall Street was anticipating revenue of $1.2 million and earnings of $1.24 per share, according to CNBC.
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"These excellent results reflect the continued strength of our full-price demand enabled by innovative products that resonate with consumers, disciplined global marketplace management and thoughtful product segmentation," said Deckers CEO Stefano Caroti on the company's conference call.
Deckers' 21% revenue growth in the first half of its fiscal year was driven by "Hoka increasing 32%, Ugg growing 13%, total company international increasing 28% and total company business to consumer (B2C) and wholesale, both growing more than 20% above last year," Caroti added.
As a result of its outperformance in the first half of the year, Deckers raised its full-year outlook. The company now anticipates revenue to increase approximately 12% to $4.8 billion and EPS to arrive in the range of $5.15 to $5.25.
"Our brands are well-positioned for the holiday season and on track to achieve an increased outlook for the full fiscal year," Caroti said.
Is Deckers stock a buy, sell or hold?
Deckers is having a stellar year on the price charts, too, with shares up 53% since the start of 2024. And Wall Street thinks the consumer discretionary stock has more room to run.
According to S&P Global Market Intelligence, the average analyst target price for DECK stock is $187.97, representing implied upside of about 10% to current levels. Additionally, the consensus recommendation is a Buy.
Financial services firm Truist Securities is one of the more bullish outfits on the large-cap stock with a Buy rating and $205 price target.
"With products continuing to resonate extremely well, deep innovation pipelines for both brands, still-low-but-building brand awareness abroad and management's thoughtful approach to marketplace segmentation, we think DECK is well-positioned to maintain a robust growth trajectory," says Truist Securities analyst Joseph Civello.
The analyst adds that "Hoka's continued outperformance and the success they are seeing from higher-price-point franchises strengthens our conviction on long-term margin expansion opportunities."
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