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Deckers' (DECK) Omni-Channel Efforts, Brand Strength Bode Well

Zacks Equity Research
·3-min read

Deckers Outdoor Corporation DECK looks poised for growth, thanks to its robust omni-channel expansion endeavors, strength in brands including HOKA ONE ONE, and impressive product and marketing strategies. DECK made substantial investments to strengthen its online presence and improve shopping experience for customers. Acceleration of omni-channel capabilities, international expansion and customer-centric strategies have been yielding favorable results for a while.

Let’s delve deeper.

Discussing Strategies

Deckers is constantly developing its e-commerce portal to resonate well with the evolving trends and grab higher sales. Management is focused on opening smaller concept omni-channel outlets and expanding programs, such as Retail Inventory Online; Infinite UGG; Buy Online, Return In Store; and Click and Collect to enhance customers’ shopping experience. During the second quarter of fiscal 2022, direct-to-consumer net sales grew, primarily driven by the HOKA ONE ONE brand. HOKA ONE ONE’s direct-to-consumer net sales increased 81% from last-year levels. DECK targets a direct-to-consumer business that will represent 50% of total revenues.

Deckers’ efforts related to product innovation and store expansion have also been encouraging so far. DECK’s focus on expanding its brand assortments, bringing more innovative line of products, targeting consumers digitally and optimizing omni-channel distribution bodes well.

Talking of its brand progress, greater acceptance of Deckers’ UGG brand's diverse product line and its progress in Europe and the Asia Pacific augur well. HOKA ONE ONE brand continues to build customer base through a combination of disruptive product innovation and a disciplined marketing approach. Deckers is progressing toward building HOKA ONE ONE, a $1-billion plus brand, elevating UGG as a global lifestyle brand with diverse product offerings round the year. HOKA ONE ONE is benefiting from Decker's organizational retail expertise developed in connection with the UGG brand.

Bottom Line

We note that DECK’s extended transit lead times and cost pressures due to container shortages, port congestion, and trucking scarcity and air freight persist. Although the volatile landscape because of the pandemic lingers, management makes efforts to mitigate such headwinds. Contributions from the direct-to-consumer business and the HOKA ONE ONE brand will keep driving growth.

Deckers shares space with Steven Madden SHOO, Wolverine WWW and Crocs CROX.

Steven Madden is the designer and marketer of fashion-forward brand and private label footwear. SHOO has a trailing four-quarter earnings surprise of 41.9%, on average.

The Zacks Consensus Estimate for Steven Madden’s current financial-year sales and earnings per share (EPS) suggests growth of 12.3% and 22.2%, respectively, from the year-ago period’s corresponding figures. SHOO has an expected EPS growth rate of 15% for three-five years.

Wolverine is the designer and manufacturer of a wide variety of casual as well as active apparel and footwear. WWW has an expected EPS growth rate of 10% for three-five years.

The Zacks Consensus Estimate for Wolverine’s 2022 sales and EPS suggests growth of 17.5% and 22.1%, respectively, from the year-ago corresponding figures. WWW has a trailing four-quarter earnings surprise of 18.3%, on average.

Crocs is the manufacturer and distributor of casual lifestyle footwear and accessories. CROX has an expected EPS growth rate of 15% for three-five years.

The Zacks Consensus Estimate for Crocs’ 2022 sales and EPS suggests growth of 48.8% and 25.8%, respectively, from the year-ago corresponding figures. CROX has a trailing four-quarter earnings surprise of 41.6%, on average.


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Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
 
Wolverine World Wide, Inc. (WWW) : Free Stock Analysis Report
 
Crocs, Inc. (CROX) : Free Stock Analysis Report
 
Steven Madden, Ltd. (SHOO) : Free Stock Analysis Report
 
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Zacks Investment Research