Will Wall Street See A Q4 Earnings Beat From Deckers (DECK)?
Zacks Investment Research | May 21, 2018 10:43PM ET
Deckers Outdoor Corporation (NYSE:DECK) is slated to report fourth-quarter fiscal 2018 results on May 24. In the trailing four quarters, this Goleta, CA-based footwear and apparel retailer has outperformed the Zacks Consensus Estimate by an average of 96.4%. In the last reported quarter, the company delivered a positive earnings surprise of 29.4%.
Investors are counting on another beat by Deckers in the to-be-reported quarter. Let’s delve deeper and take a look at the factors that will be influencing the results.
Here Are the Deciding Factors
Deckers is targeting profitable markets and remains focused on product innovations as well as store augmentation plan. Also, the company’s focus on expanding brand assortments, bringing more innovative line of products, targeting consumers through marketing and optimizing omni-channel distribution bode well. In keeping with the changing trends, Deckers has made substantial investments to strengthen online presence and opening smaller concept omni-channel outlets.
Additionally, the company has undertaken strategic initiatives in an effort to drive long-term growth. Its store-fleet optimization plan focuses on striking the right balance between digital and physical stores. Deckers also expects cost savings of about $150 million backed by improvement in cost of goods sold and SG&A savings, which includes consolidation of retail outlets and process improvement efficiencies. This in turn should help it realize $100-million operating profit improvement by fiscal 2020.
Management had earlier guided fourth quarter net sales in the range of $370-$375 million compared with $369.5 million reported in the year-ago period. The company had forecasted earnings in the range of approximately 15-20 cents compared with 11 cents a share delivered in the prior-year quarter.
However, industry experts remain concerned about Deckers' over-reliance on the UGG brand. In the event of stagnation or decline of UGG sales growth, the company's overall results will be adversely affected. This is because the percentage of contribution from the company’s other brands are too minimal to offset any slowdown in UGG sales.
Deckers Outdoor Corporation Price, Consensus and EPS Surprise
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