On Friday, Telsey Advisory Group adjusted their financial outlook for shares of Deckers Outdoor (NYSE: NYSE:DECK), increasing the price target to $190 from $183, while reiterating an Outperform rating on the company's stock. This revision follows Deckers Outdoor's recent announcement of robust quarterly results, surpassing market expectations with significant sales growth.
Deckers Outdoor reported substantial top-line growth, nearly doubling market predictions. This surge was led by the company's two largest brands, UGG and HOKA. Notably, HOKA achieved a record revenue for the second fiscal quarter of 2025 and posted the most substantial sales growth since the fourth fiscal quarter of 2023. The brand's success is attributed to its innovative products and growing global popularity.
The company also saw strong double-digit increases in sales across all channels and regions. Additionally, Deckers Outdoor's gross margin exceeded forecasts, benefiting from the continued sales strength of its higher-margin products from UGG and HOKA.
Following these positive results, Deckers Outdoor has raised its full-year financial outlook. However, the company has taken a conservative approach, with the updated guidance remaining below the prior consensus expectations for the top and bottom lines.
The Telsey Advisory Group's revised price target of $190 is based on a 29.4 times multiple on the firm's two-year forward EPS estimate of $6.46. This valuation is consistent with the recent average next twelve months (NTM) multiple for Deckers Outdoor.
The company's ability to deliver strong performance in an uncertain economic environment underscores its robust market position and the potential for sustained growth through its diverse brand portfolio.
In other recent news, Deckers Outdoor Corporation has made headlines with its impressive financial performance. The company exceeded second-quarter financial expectations, reporting a 35% sales increase for its Hoka brand and a 13% rise in sales for the UGG brand. This success led to an upward adjustment of the company's annual sales growth expectations to 12%, with anticipated revenue of $4.8 billion.
Deckers' quarterly net sales reached $1.31 billion, surpassing the forecasted $1.20 billion. Furthermore, the company reported an adjusted profit of $1.59 per share, higher than the predicted $1.23. Analysts from firms such as Truist Securities, Evercore ISI, Barclays (LON:BARC), and Jefferies have lauded the company's strong performance and market position, leading to raised price targets and positive ratings.
In addition to these financial achievements, retailers like Dick's Sporting Goods (NYSE:DKS) and Nordstrom (NYSE:JWN) are increasing their shelf space for Hoka products, reflecting Deckers' successful brand appeal and strategic marketing investments. These developments highlight Deckers' robust growth and strategic market positioning.
InvestingPro Insights
Deckers Outdoor's impressive quarterly results are further supported by InvestingPro data, which reveals a robust revenue growth of 20.3% over the last twelve months as of Q1 2025. This aligns with the company's reported strong sales performance, particularly in its UGG and HOKA brands.
The company's financial health is underscored by two key InvestingPro Tips. Firstly, Deckers holds more cash than debt on its balance sheet, indicating a strong liquidity position. Secondly, its cash flows can sufficiently cover interest payments, suggesting financial stability even as it pursues growth.
Deckers' stock has shown remarkable performance, with a one-year price total return of 85.26% as of the latest data. This substantial return reflects investor confidence in the company's growth strategy and brand strength.
For investors seeking more comprehensive insights, InvestingPro offers 11 additional tips for Deckers Outdoor, providing a deeper understanding of the company's financial position and market performance.
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