Hoka Maker Delivers 'Strong Upside' In Q4, 5 Analysts Raise Forecasts On Deckers Outdoor

Zinger Key Points
  • Deckers Outdoor posted revenue of $959.8M and EPS of $4.95, higher than Street’s $888.5M and $2.97, one analyst said.
  • The company’s FY25 EPS guidance of $29.50-$30.00 appears “very conservative,” another analyst added.

Shares of Deckers Outdoor Corp DECK, the company behind Hoka sneakers, were climbing in early trading on Friday, after the company reported upbeat quarterly results.

The results came amid an exciting earnings season. Here are some key analyst takeaways:

  • Stifel analyst Jim Duffy reiterated a Hold rating, while raising the price target from $775 to $825.
  • Wedbush analyst Tom Nikic maintained an Outperform rating, while lifting the price target from $1,000 to $1,030.
  • Truist Securities analyst Joseph Civello reaffirmed a Hold rating, while raising the price target from $864 to $1,011.
  • KeyBanc Capital Markets analyst Ashley Owens reiterated an Overweight rating, while lifting the price target from $960 to $1,015.
  • Telsey Advisory Groups analyst Dana Telsey maintains an Outperform rating, while raising the price target from $985 to $1,100.

Check out other analyst stock ratings.

Stifel: Deckers Outdoor delivered a "strong upside," with revenue of $959.8 million and earnings of $4.95 per share surpassing Street estimates of $888.5 million and $2.97 per share, respectively, Duffy said in a note.

"Revenue upside reflects stronger HOKA (+$33mn) and UGG revenue (+$31mn), partially offset by lower than expected Teva (-$4mn), and Sanuk revenue (-$3mn), and slightly lower Koolaburra/Other revenue," he added. "All-in, we are impressed by execution but remain concerned about durability of the multiple if growth slows and see HOKA growth of particular importance to valuation," the analyst further wrote.

Wedbush: Deckers Outdoor delivered "a huge beat," with revenue growth of 21% and earnings growth of 43% year-on-year, Nikic said. Management guided to 10% revenue growth for fiscal 2025, and its earnings outlook of $29.50-$30.00 per share appears "very conservative," he added.

"Considering the strong momentum at both major brands (UGG and Hoka), conservative FY25 guidance, and a fortress balance sheet ($1.5 billion in cash with no debt), we remain very bullish on DECK shares," the analyst wrote.

Truist Securities: "UGG demand remained white-hot and HOKA's robust trajectory continued," Civello wrote in a note. Although HOKA's DTC trends decelerated versus the prior quarter, "wholesale sell-in meaningfully accelerated," he added.

The analyst expressed concern, however, around risks in broader discretionary spending and tough comparisons ahead.

KeyBanc Capital Markets: Deckers Outdoor was able to beat "already lofty expectations" for the quarter, Owens said. The fiscal 2025 guidance came broadly in-line with Street expectations. Hoka is “expected to lead FY top-line growth via expanding brand awareness, global DTC growth, and strategic door expansion (largely int’l) while maintaining marketplace management," he added.

"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," the analyst further wrote.

Telsey Advisory Group: The company's earnings upside was driven by upbeat results across the board, "including accelerating sales growth and significant gross margin expansion," Telsey said. "The beat comes despite a ~$0.19 drag to EPS given a higher tax rate relative to consensus.”

Management expects net sales to grow by about 10% to $4.7 billion, with Hoka growing 20%, "driven by DTC growth, strategic partner expansion, and increased brand awareness and market share internationally" and Ugg growing by mid-single-digits, "driven primarily by international expansion and prioritizing its DTC channel domestically," the analyst wrote.

DECK Price Action: Shares of Deckers Outdoor had risen by 14.14% to $1,032.88 at the time of publication on Friday.

Image: Shutterstock

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Posted In: Top StoriesMoversAshley OwensDana TelseyExpert IdeasHOKAJim DuffyJoseph CivelloKeyBanc Capital MarketsStifelStories That MatterTelsey Advisory GroupTom NikicTruist SecuritiesWedbush
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