Deckers Outdoor is Monday's IBD Stock Of The Day. The marketer of Hoka running shoes and Ugg boots and slippers received a lift amid positive preannouncements from Crocs and specialty apparel retailers. DECK stock rebounded off key support, flashing an early entry opportunity.
DECK stock was among a host of footwear stocks dragged down on Dec. 22 by Nike's announcement of a softer sales outlook. The Dow Jones giant trimmed its fiscal 2024 sales outlook to 1% growth, down from a mid-single-digit percentage gain.
Still, at the time, Truist analysts noted that Nike was likely losing share to companies like Deckers and On Holding.
That helps explain why Deckers and ONON were among the stocks getting a bounce on Monday from positive retail news, while shares of NKE were subdued.
Also on Monday, Tiger Woods bid adieu to Nike after 27 years. On Holding co-CEO Martin Hoffman knocked down speculation that Woods may sign his next shoe deal with the Swiss company, saying flatly at the ICR Conference, "It's not going to be us."
Crocs said its Q4 revenue would grow at least 1%, up from an outlook of -1% to -4%, helped by nearly 10% growth for Crocs Brand footwear. Abercrombie & Fitch and Lululemon were among other firms that raised their holiday-quarter outlooks.
Deckers has posted two quarters of accelerating revenue growth (from 8% to 10% and 25%) and four quarters of accelerating EPS growth (4% to 24%, 38%, 45% and 79%).
DECK Stock
DECK stock rose 3.8% to 676.98 in Monday afternoon stock market action. That reversed Friday's move that saw Deckers fall 3% in a test of its 50-day and 10-week moving averages.
When a leading stock like DECK pulls back to its 10-week line or 50-day line and remains above a recent buy point, that provides an opportunity to accumulate more shares.
Ideally, the move above the 10-week/50-day line comes in above-average volume, providing a confirming signal of strength. In this case, DECK volume is running a bit below average.
However, DECK stock also is trying to regain its 21-day exponential moving average. A move past the 21-day line and past the Jan. 3 high of 682.58 would constitute a bullish break of the down-sloping trend line from December's all-time high.
Deckers is ranked No. 1 by IBD Stock Checkup in its Apparel-Shoes & Related Manufacturing industry group. DECK has a 99 IBD Composite Rating, which puts it in the top 1% of all stocks based on technical and fundamental factors.
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