Deckers Outdoor Shares Plunge Despite Solid Earnings Beat

Shares of Deckers Outdoor fell 17% after a fiscal Q3 report. Despite beating EPS and sales estimates, analysts found the raised guidance insufficient. The stock has been trading high, leading to a reset in expectations, which appears necessary for long-term growth.

Date: 31-01-2025

AI Rating: 5

Earnings Per Share (EPS)
Deckers reported a Q3 EPS of $3, marking a 19% increase year over year, and surpassing analysts' expectations. This positive performance indicates strong profitability amidst competitive pressure.

Revenue Growth
Net sales for Deckers jumped 17% year over year to over $1.8 billion, again exceeding analysts' forecasts. This highlights a robust consumer demand for the company’s products.

Guidance Adjustments
Deckers maintained some aspects of its full-year guidance while raising net sales growth expectations from 12% to 15%. Additionally, the gross margin guidance increased from 55.5% to a range of 57%. These adjustments showcase management's confidence in maintaining a strong revenue trajectory.

Deckers' stock price decline stems from elevated market expectations. Although the reported results were solid, analysts anticipated even more significant upward revisions, which have not materialized. The market had likely overestimated the company's potential, leading to a corrective drop after the announcement. Overall, these elements indicate a need for market recalibration of expectations amidst ongoing solid performance metrics.

Stocks: DECK