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What's in Store for Deckers Outdoor (DECK) in Q4 Earnings?

Deckers Outdoor Corp. DECK, a leading designer, producer and brand manager of innovative, niche footwear and accessories, is slated to report fourth-quarter fiscal 2017 results on May 25.

Previous quarter, the company had delivered a negative earnings surprise of 3.1%. In the trailing four quarters, it outperformed the Zacks Consensus Estimate by an average of 24%. Let’s see how things are shaping up prior to this announcement.

What to Expect?

The question lingering in investors’ minds now is whether Deckers Outdoor will be able to come up with a positive earnings surprise in the quarter to be reported. The current Zacks Consensus Estimate for the quarter under review is pegged at a loss of 6 cents. In the year-ago quarter, the company had posted earnings per share of 11 cents.

We note that the Zacks Consensus Estimate has been stable over the past 30 days. Analysts polled by Zacks expect revenues of $359 million, down 5.3% from the year-ago quarter.

We noted that the stock has underperformed the Zacks categorized Shoes & Retail Apparel industry in the past six months. The company’s shares have decreased 9.0%, while the Zacks categorized industry has fallen 0.9%.  

Factors Influencing This Quarter

Deckers’ focus on expanding its brand assortments, bringing more innovative line of products, targeting consumers digitally via marketing and a sturdy eCommerce as well as optimizing omni-channel distribution bode well.

Deckers targets profitable and underpenetrated markets, along with focus on product innovations and store augmentation. Further, management is transitioning to a direct subsidiary model from a distributor model outside the U.S. The company is also making substantial investments to fortify its online presence.

Management trimmed its fiscal 2017 outlook following a disappointing performance in the third-quarter fiscal 2017. Deckers now expects net sales to decline 5% and projects earnings between $3.45 and $3.55 per share. The company had earlier forecast net sales to decline in the band of 1.5–3% and earnings in the range of $4.05–$4.25 for fiscal 2017.

In the fourth quarter, net sales are estimated to decline by 5–6%. Management envisions bottom line in the band of break-even to a loss of $0.10 per share, compared to the adjusted earnings of $0.11 reported in the year-ago period.

What the Zacks Model Unveils?

Our proven model does not conclusively show that Deckers Outdoor is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Deckers Outdoor has an ESP of 0.00% as both the Zacks Consensus Estimate and the Most Accurate estimate are pegged at a loss of 6 cents. The company’s Zacks Rank #3 (Hold) increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

Deckers Outdoor Corporation Price, Consensus and EPS Surprise

Other Stocks Poised to Beat Earnings Estimates

Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to come up with an earnings beat:

Best Buy Co., Inc. BBY has an Earnings ESP of +10.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Burlington Stores, Inc. BURL has an Earnings ESP of +2.86% and a Zacks Rank #2.

Ulta Beauty, Inc. ULTA has an Earnings ESP of +0.56% and a Zacks Rank #2.

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Deckers Outdoor Corporation (DECK): Free Stock Analysis Report
 
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