Deckers stock pops 8% after crushing analyst estimates

Deckers Brands, renowned for its portfolio of footwear and lifestyle brands, has reported substantial earnings beat for its fourth fiscal quarter, sending its shares rising by more than 8%.

The company announced an FQ4 adjusted EPS of $4.95, eclipsing the analyst estimate of $2.90 by a significant margin. Revenue for the quarter also outperformed expectations, coming in at $959.8 million against the consensus estimate of $885.04 million.

The impressive quarterly performance was driven by a 21.2% increase in net sales compared to the same period last year, with the HOKA brand experiencing a notable 34.0% surge in sales. The UGG brand also saw a healthy 14.9% increase, contributing to the company's overall growth.

Deckers' President and CEO, Dave Powers, attributed the record results to the company's commitment to profitability and the strong position of its brands in the market. "Our talented teams are highly motivated to continue driving towards the long-term opportunities of these iconic brands," said Powers.

Looking ahead, Deckers provided a positive outlook for the full fiscal year 2025, projecting revenue growth of approximately 10% to $4.7 billion, which is slightly above the analyst consensus of $4.69 billion.

The company anticipates an adjusted EPS in the range of $29.50 to $30.00, indicating continued confidence in its operational performance. 

The company's CFO, Steve Fasching, highlighted Deckers' consistent double-digit revenue growth over the past four years and a more than threefold increase in earnings per share, underscoring the demand for its brands and the effectiveness of its operating model.

Deckers' strong financial health is further evidenced by its cash and cash equivalents totaling $1.502 billion and no outstanding borrowings.

Moreover, the company's proactive stock repurchase program saw the buyback of approximately 715 thousand shares during the fiscal year 2024.

Following the report's release, KeyBanc Capital Markets analysts reiterated an Overweight rating on DECK, and lifted their target price from $960 to $1,015. 

"We are encouraged by the focus on delivering newness/innovation and channel management within both HOKA and UGG, which provides us with confidence that DECK will continue to deliver throughout the year," analysts wrote.

"The year currently implies a deceleration to growth post-1Q, which we see as an opportunity to provide potential upside to our estimates if demand persists."