Market Overview

Ugg, A Downgrade: Stifel Moves Deckers Outdoor To Hold On Limited Upside Forecast

Ugg, A Downgrade: Stifel Moves Deckers Outdoor To Hold On Limited Upside Forecast
Related DECK
Deckers Gets Upgrade As UGG Deal With Macy's Less Harmful Than Anticipated
Benzinga's Top Upgrades, Downgrades For August 23, 2018
Know This Sell Rule: Weak Rebound Action After Violating The 50-Day Line (Investor's Business Daily)

Deckers Outdoor Corp (NYSE: DECK) reported Thursday after the close with forecast-beating results for the fiscal 2019 first quarter. 

The Analyst

Stifel analyst Jim Duffy downgraded Deckers Outdoor from Buy to Hold and increased the price target from $120 to $123.

The Thesis

Deckers Outdoor's strong quarterly results are reflective of execution toward multiyear margin improvement plans, Duffy said in a Thursday note. (See the analyst's track record here.) 

Stifel's downgrade comes due to concerns that meaningful upside may prove limited for Decker, the analyst said. 

Duffy attributed the narrower-than-expected loss for the quarter to higher revenues, higher gross profit dollars, lower adjusted SG&A expenses, non-operating income and a 1-cent benefit from an adjusted tax rate.

Much of the earnings beat came about due to the timing of earlier-than-expected shipments, Duffy said. 

Revenue growth was driven by increases in the UGG, Hoka and Teva brands and partly offset by declines in Sanuk sales, the analyst said. Domestic sales grew 17.4 percent year-over-year and international sales rose 22.3 percent.

The company updated its fiscal 2019 guidance, raising the low end of its revenue guidance and increasing the adjusted EPS guidance. 

"Management characterized inventory on the books and in the channel as supportive of full-priced selling going into the key selling season." 

The Price Action

Deckers Outdoor shares have gained about 49 percent year-to-date. The stock was sliding 10.61 percent to $106.58 at the time of publication Friday.

Related Links:

Deckers Outdoor Potential M&A: From Rumor To Reality

Shoe Carnival Inc. (SCVL) All Set To Move Into Bullish Zone

Latest Ratings for DECK

Aug 2018SusquehannaUpgradesNegativeNeutral
Aug 2018BuckinghamMaintainsNeutralNeutral
Jul 2018WedbushMaintainsNeutralNeutral

View More Analyst Ratings for DECK
View the Latest Analyst Ratings

Posted-In: Jim Duffy StifelAnalyst Color Downgrades Price Target Analyst Ratings Best of Benzinga


Related Articles (DECK)

View Comments and Join the Discussion!

A Fairy-Tale Ending: Disney, Fox Shareholders Approve Merger

Caterpillar Earnings Preview: Economic Outlook Seems Good, Tariffs Adding Uncertainty