QUOTE AND NEWS
Motley Fool  Jul 25  Comment 
Is this meaningful? Or just another movement?
StreetInsider.com  Jul 25  Comment 
52-Week High: Deckers Outdoor Corp (Nasdaq: DECK) $94.80. Deckers posted Q2 loss of $1.07 per share, which came in about 28 cents per share narrower than expected. The Company expects second quarter 2015 revenues to increase approximately 18...
Benzinga  Jul 25  Comment 
Deckers Outdoor (NYSE: DECK) reported its first-quarter earnings on Thursday. Shares of the company are up more than six percent. Below are some key takeaways from its conference call: • While we're pleased to have achieved the 24...
TheStreet.com  Jul 25  Comment 
NEW YORK (TheStreet) -- Shares of footwear company Deckers Outdoor are climbing after the company reported first quarter losses per share that were not as steep as expected and revenue that exceeded analysts' consensus view. The maker of UGGs and...
Benzinga  Jul 25  Comment 
Deckers Outdoor (NYSE: DECK) strong second-quarter results impressed investors, with shares trading up nearly 10 percent to $93.50 in pre-market action Thursday. The maker of UGG boots and Teva sandals posted a narrower-than-expected net loss...
Benzinga  Jul 25  Comment 
Analysts at Jefferies upgraded Deckers Outdoor (NASDAQ: DECK) from Hold to Buy. The target price for Deckers Outdoor has been raised from $78 to $130. Deckers Outdoor shares have surged 59.16% over the past 52 weeks, while the S&P 500 index...
Benzinga  Jul 25  Comment 
SeekingAlpha  Jul 25  Comment 
Deckers Outdoor Corp. (NYSE:DECK) Q1 2015 Results Earnings Conference Call July 24, 2014 4:30 PM ET Executives Linda Pazin - Vice President of Investor Relations and Corporate Communications. Angel Martinez - President and CEO ...
SeekingAlpha  Jul 24  Comment 
The following audio is from a conference call that will begin on July 24, 2014 at 16:30 PM ET. The audio will stream live while the call is active, and can be replayed upon its completion. Listen now Complete Story »
SeekingAlpha  Jul 22  Comment 
By Selerity Research: By Craig Bowles Overview Deckers Outdoor, Corp. (NYSE:DECK) is slated to report 2Q 2014 earnings after the bell on Tuesday, June 24th. The earnings release is expected at approximately 4:00 p.m. EST followed by a...
Clusterstock  Jul 21  Comment 
A wave of innovation is driving a dramatic shift in the way we make payments. In this presentation, we highlight the most important trends fueling the changes: the rise of  payment apps, mobile registers, e-commerce, and the decline of cash...




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Deckers Outdoor Corporation (NASDAQ:DECK) makes niche footwear, such as sport sandals and luxury sheepskins. Like most clothing manufacturers, Decker's is subject to both the fickle fashion tastes of its consumers and general economic conditions. These vulnerabilities take on new dimensions for Deckers, however, due to the unique nature of its business. The company's main product is its UGG boot, a trendy sheepskin boot that accounts for three-quarters of its sales. The company's reliance on a single product, however, means that any shift consumer fashion preferences away from sheepskin boots will have a dramatic impact on its business. Moreover, a large part of the company's customer base consists of young middle income women, and this increases the company's sensitivity to economic conditions. The UGG boot can cost up to $300 and as such is considered a luxury by the company's customers. As a result, during downturns, UGG will be the first thing to get the boot. The company earned $265 million in revenue and $31 million i net income in 2009.[1]

Company Overview

The company seeks to offer footwear that is distinctive and appeals broadly to men, women and children. Its products are sold through domestic retailers, international distributors, and directly to end-user consumers through its websites and catalogs. Business for Deckers Outdoor is seasonal, with the highest percentage of Teva brand net sales occurring in the first and second quarters of each year and the highest percentage of UGG brand net sales occurring in the third and fourth quarters. To date, the Simple brand has not had a seasonal impact on the Company.

Products[2]

The company's products are sold under Teva, Simple, and UGG brand names. T

  • UGG - is the company's luxury comfort brand and the category creator for luxury sheepskin footwear.
  • Teva - is the company's outdoor performance and lifestyle brand and pioneer of the sport sandal market.
  • Simple - as a response to the massive amount of waste produced by the footwear industry, the Simple brand launched a new collection of sustainable footwear called Green Toe®. Green Toe represents a revolutionary shift in thinking about footwear by building a shoe from the inside out using sustainable materials and processes.

Business Growth

FY 2009 (ended December 31, 2009)[1]

  • Net sales fell 13% to $265 million.
  • Net income increased 2% to $31 million.

Trends and Forces

Consumer preferences for sheepskin determine DECK's success

The retail business depends on a company's ability to react to the rapidly changing fashion tastes of consumers and to provide appealing merchandise in a timely and cost effective manner. Specifically for Deckers Outdoor, the continued strength of Teva, UGG and Simple brands is paramount. The success of Deckers depends on UGG boots remaining fashionable. If UGG boots were ever to go out of style, as is often the case with fashion trends, Deckers could potentially lose up to 80% of its revenue. However, some features of the UGG boot that have allowed it to persist longer than most fashion trends of this kind, is that it comfortable, and, due to the sheepskin, allows a "breathability" that keeps the foot warm in cold temperatures and cool in the summer.

DECK has greater exposure to U.S. economic cycles than other retailers

A depressed economy hurts businesses that appeal to niche markets and rely on a consumer’s disposable income. Deckers is a niche market because their UGG boots, their primary source of revenue, at upwards of $200 are a luxury brand of shoe. Consumers can find cheaper shoes, even cheaper UGGs (albeit it knock-offs) if need be. Furthermore, because a significant portion of Deckers' consumers are in the middle class, Deckers will face a difficult 2008 if the economy goes through a recession as predicted.

Limited resources for supply of sheepskin

Sheepskin, which is in high demand and limited supply, is the principal raw material for most of Deckers' UGG brand products. These skins are available only during the Spring lambing season. Several problems that sheep tend to suffer from are having about a 10% natural fatality rate and many births which are still born. Two suppliers provided all of the sheepskin purchased by Deckers' independent manufacturers.[3] Furthermore, sheep are susceptible to hoof and mouth disease, which can result in the extermination of an infected herd. Additionally, the supply of sheepskin can be adversely impacted by weather conditions and harvesting decisions.

DECK is almost completely reliant the UGG boot

The success of Deckers Outdoor is linked with the success of the UGG boot, which represents 77% of their net sales. In 1998 the UGG boot began to be marketed as a high fashion luxury item with price tags of up to several hundred dollars. The success of UGGs took off as more celebrities bought into the comfortable lifestyle and were pictured in more and more magazines. However, aside from being a trendy boot, the UGG is generally recognized as comfortable and, as a result of 100% sheepskin, breathable. Deckers believes that the luxury and comfort features of UGG brand products will continue to drive long-term consumer demand, however, as a result of the significant fashion element to UGG brand they seek to prolong its longevity by offering a broader product line suitable for wear in a variety of climates and occasions and by limiting distribution to selected higher-end retailers. As part of this strategy, They have increased their product offering to approximately 150 styles for men, women and children.

Competition

A number of Deckers' competitors have significantly greater financial resources, as well as greater brand awareness in the footwear market. Competitors include athletic and footwear companies, branded apparel companies and retailers with their own private labels. Two of note are Nike (NKE) and The Timberland Company (TBL).

References

  1. 1.0 1.1 DECK 2009 10-K "Selected Financial Data" pg. 24
  2. DECK 2009 10-K "Products" pg. 3-4
  3. DECK 2009 10-K pg. 14
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