DECK stock is the IBD Stock Of The Day as the Ugg and Hoka brand owner rises off support at a key technical level, backed by a strong relative strength line.
Goleta, Calif.-based Deckers Outdoor is poised to keep growing earnings and revenue, but at a lower double-digit pace.
Its celeb-favorite Hoka One sneaker brand continues to pound out growth, recently achieving a $1 billion revenue milestone. Fans of the well-cushioned Hoka sneaker brand include Cameron Diaz, Gwyneth Paltrow and Reese Witherspoon, as well as runners and nurses.
More importantly, footwear tends to be recession resistant. People buy shoes in good times and bad. However, Deckers faces headwinds from lingering supply disruptions due to the Covid-19 pandemic. It also faces labor shortages; along with the rapid rise in inflation and geopolitical tensions, which are weighing on discretionary spending by consumers.
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DECK stock belongs to the IBD 50 list of top growth stocks. The company also makes apparel and accessories.
DECK Stock
Shares of Deckers Outdoor rose 1.9% to 337.52 amid mixed action on the stock market today, rebounding from its 50-day and 21-day lines.
DECK stock is consolidating after a strong summer rally. It closed above the 10-week moving average last week, snapping a three-week slide. Crocs is also holding up and trying to build a base after coming off summer lows.
The relative strength line for DECK stock is trending toward a record high after slumping at the start of 2022, according to MarketSmith chart analysis. A rising RS line is a sign of outperformance vs. the S&P 500. It's an especially positive sign given the recent stock market turbulence.
Deckers stock needs at least another week before forging a proper base.
A 94 Relative Strength Rating means that Deckers Outdoor stock has outperformed 94% of all stocks in IBD's database over the past year.
That compares to an RS Rating of 77 for CROX stock, 51 for Skechers and 21 for Nike. They have all seen Amazon move into private-label apparel, shoes and accessories.
DECK stock shows zero quarters of rising fund ownership, according to the Stock Checkup tool.
Deckers Outdoor's Earnings
DECK stock earns a superior IBD Composite Rating of 95, out of a highest-possible 99. The Comp rating combines key fundamental and technical metrics in a single easy-to-use score.
It shows a 94 EPS Rating out of a best-possible 99. Deckers continued to grow earnings throughout the coronavirus pandemic, which drove up casual, comfortable slipper, sandal and sneaker sales.
In fiscal 2021, Deckers earnings grew 40% per share as revenue rose 19%. In 2022, both earnings and revenue growth came in above 20%. Both Deckers earnings per share and revenue are seen growing 11% in 2023.
In the latest, June-ended, quarter, Hoka brand sales increased 55% and Teva sales rose 2%. But Ugg sales fell 2%. Other brands, mainly Koolaburra, sank 45%.
Online or direct-to-consumer sales are growing.
"Fiscal year 2023 is off to a solid start, with Hoka driving strong growth, propelling the brand to eclipse the billion-dollar milestone over the trailing twelve-month period," CEO Dave Powers said in a July 28 earnings release.
Over the past three months, Deckers Outdoor stock has surged 28.9%. Year to date through Oct. 10, DECK stock shows a 9.6% loss vs. a 23.3% decline for the S&P 500.
