These Boots are Made for Walking; Sterne Agee Reiterates Buy and $110 PT on Deckers

In an intraday report published Monday, Sterne Agee analyst Sam Poser reiterated a Buy and $110 price target on Deckers Outdoor Corp. DECK. Retailers reported that UGG sales increased over 20% in December. Poser noted that waterproof boots, other boots and slippers are strong sellers. These sales are setting the stage for lean inventories and a strong position for retailers for Fall 2014. According to Sterne Agee data, UGG wholesale revenue is expected to increase MSD in 4Q13. Waterproof boots, including Butt & Adirondack, have done very well. Bailey Triplet sales, with a retail price of $230.00, “have re-emerged with gusto.” Poser commented, “The strength of UGGs in December and the cold start to January will likely leave Deckers' inventory clean and below $240M for the end of 2013 which should help drive margin improvement in 2014. Inventory levels at UGGs' retail partners should also end the year at low levels, providing for more dollars available to buy the new, positively reviewed, Fall '14 UGG product offerings.” Shares of Deckers closed at $85.73 on Friday and are currently trading at $88.40, up 3.11%.