Deckers Outdoor (DECK) stock is trading notably higher Friday after the footwear giant beat top- and bottom-line expectations for its fiscal 2025 first quarter and raised its full-year profit forecast.
In the three months ended June 30, Deckers' revenue increased 22.1% year-over-year to $825.4 billion, led by 29.7% jump in sales of its Hoka brand to $545.2 million. Its earnings per share (EPS) surged 87.6% from the year-ago period to $4.52.
"HOKA and UGG continue to drive robust full-price demand in the global marketplace by delivering compelling product that consumers love," Deckers outgoing CEO Dave Powers said in a statement.
The results handily beat analysts' expectations. Wall Street was anticipating revenue of $808 million and earnings of $3.48 per share, according to CNBC.
As a result of its strong performance in the first quarter, Deckers raised its full-year profit forecast. The company now anticipates EPS in the range of $29.75 to $30.65, up from its previous forecast of $29.50 to $30. It continues to expect annual revenue growth of approximately 10% to $4.7 billion.
"Fiscal year 2025 is off to a great start, with HOKA and UGG delivering fantastic first quarter results that have contributed to our increased outlook for the full fiscal year," said Deckers Chief Commercial Officer and incoming CEO Stefano Caroti in a statement.
Deckers also noted that it repurchased approximately $152 million worth of shares during the quarter and has approximately $789.7 million remaining under its share repurchase program. Stock buybacks can boost value for shareholders.
Is Deckers stock a buy, sell or hold?
Deckers is outpacing the broader market on a price basis this year, up 35% so far vs a 14% return for the S&P 500. And Wall Street thinks the consumer discretionary stock has more room to run.
According to S&P Global Market Intelligence, the average analyst target price for DECK stock is $1,081.69, representing implied upside of about 20% to current levels. Additionally, the consensus recommendation is a Buy.
Financial services firm Wedbush is one of the bullish outfits on DECK stock with an Outperform rating (equivalent to a Buy) and $1,030 price target.
"DECK once again delivered a strong quarter, beating sales and EPS expectations by wide margins, with both core brands showing continued momentum," writes Wedbush analyst Tom Nikic in a note to clients. "All in all, we remain buyers of the name, given still conservative fiscal 2025 guidance (conservative sales and margin assumptions could lead to more beats-and-raises), best-in-class momentum at Hoka, and continued strength at Ugg."
