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What's in Store for Deckers (DECK) this Earnings Season?

Deckers Outdoor Corp. DECK,  the designer, producer and brand manager of innovative, niche footwear and accessories, is slated to report first-quarter fiscal 2018 results on Jul 27, after the closing bell.

In the preceding quarter, the company had delivered a positive earnings surprise of 283.3%. In the trailing four quarters, it outperformed the Zacks Consensus Estimate by an average of 74%. 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 surprise in the quarter to be reported. The current Zacks Consensus Estimate for the quarter under review is pegged at a loss of $1.67. In the year-ago quarter, the company had posted a loss per share of $1.80. We note that the Zacks Consensus Estimate has been stable in the past 30 days. Analysts polled by Zacks expect revenues of $179.3 million, up 2.8% from the year-ago quarter.

We noted that the stock has outperformed the industry in the past three months. The company’s shares have increased 12.8%, while the industry gained 7.2%.

Factors Influencing the Quarter

Deckers Outdoor is targeting profitable markets and remains focused on product innovations along with store augmentation. Management is also enhancing eCommerce capabilities and transitioning to a direct subsidiary model from a distributor model outside the U.S. The company’s focus on expanding brand assortments, bringing more innovative line of products, targeting consumers through marketing and optimizing omni-channel distribution bode well.

Moreover, in an effort to drive long-term growth the company has taken strategic initiatives. Its store fleet optimization plan focuses on striking the right balance between digital and physical stores. Additionally, Deckers plans to close approximately 30–40 outlets over the next two years.

Earlier, the company has stated that in the first quarter it expects net sales to increase by low-single digits. Management envisions loss per share of approximately $1.70–$1.65. Moreover, decline in sales of UGG brand have been a major concern for the investors. During the first, second, third and fourth quarters of fiscal 2017, UGG brand net sales have declined 19.8%, 2.1%, 5.3% and 1.1%, respectively.

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 $1.67. The company’s Zacks Rank #1 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


Deckers Outdoor Corporation Price, Consensus and EPS Surprise | Deckers Outdoor Corporation Quote

Stocks with Favorable Combination

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

L Brands, Inc. LB has an Earnings ESP of +2.38% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Costco Wholesale Corporation COST has an Earnings ESP of +0.50% and a Zacks Rank #3.

Nordstrom, Inc. JWN has an Earnings ESP of + 4.92% and a Zacks Rank #3.

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