Skechers and Hoka maker Deckers Outdoor diverged after their respective quarterly reports late Thursday. DECK stock powered to new all-time highs Friday while SKX stock tumbled from its record levels.
Deckers: Hoka-Powered Earnings
Deckers reported a 44% increase in Q3 adjusted earnings to a record $15.11 per share, slowing after five quarters of accelerating gains. Revenue growth slowed after accelerating the past two quarters with a 16% jump to a record $1.56 billion.
FactSet expected a 9.5% earnings increase to $11.48 per share adjusted on 8% revenue growth to $1.45 billion.
Direct-to-consumer net sales spiked 22.7% to $858.1 million. Comparable DTC sales increased 21.8%. Deckers' wholesale revenue rose 8.6% to $702.2 million. The company's gross margin improved to 58.7% for the quarter from 53%.
Hoka brand sales once again saw the greatest sales increase for Deckers with a 21.9% jump to $429.3 million. But the company's Ugg brand remained the top seller. Ugg revenue increased 15.2% to $1.07 billion. Teva and Sanuk shoe sales fell 16.2% and 28.9%, respectively.
Deckers guided a roughly 36% increase in adjusted 2024 earnings to range from $26.25 to $26.50 per share. It sees full-year revenue increasing 14% to $4.15 billion. FactSet analysts expect 2024 earnings of $24.18 per share on $4.1 billion in sales.
Telsey Advisory last Thursday lifted its price target on DECK stock to $850 from $800, noting that Hoka and Ugg brand sales are likely to benefit from "selective" consumer spending. The firm maintained an overweight rating on the shares. Truist on Friday hoisted its price target on Deckers to $859 from $790 and kept a buy rating on the stock. Ugg direct-to-consumer sales for the quarter are trending above expectations, analyst Joseph Civello wrote in a research note. Civello is positive on Deckers' wholesale prospects, adding that key styles continue to sell out as soon as they are restocked.
Deckers Stock
Deckers Outdoor spiked 14.1% Friday to a new record high after rallying more than 10% premarket. Shares swung 2.5% higher Thursday after dropping more than 2% Wednesday.
DECK stock hit its prior all-time high 776.07 on Tuesday. Shares scored a late-October breakout, then rebounded from support at the 10-week line in early January.
Deckers rallied nearly 32% so far this year after rocketing about 68% in 2023.
Skechers
Skechers reported a 16.7% increase in adjusted earnings to 56 cents per share for its Q4 results late Thursday, slowing after three quarters of accelerating gains. Fourth-quarter revenue rose 4.4% to $1.96 billion after reporting about an 8% increase the past two quarters.
FactSet analysts expected Skechers' to announce adjusted earnings of 55 cents per share on $2.03 billion in sales.
Direct-to-consumer sales increased 20.3% for the quarter to $168.7 million.
Skechers' full-year earnings jumped 46.6% to $3.49 per share while revenue rose 7.5% to a record $8 billion. The results were in-line with expectations of $3.48 per share on $8.07 billion in sales.
The company's Q1 earnings guidance between $1.05 and $1.10 per share came in below FactSet estimates of $1.20 per share. Skechers forecasts Q1 revenue to range from $2.175 billion and $2.225 billion, compared to Wall Street views of $2.19 billion.
Skechers sees 2024 earnings increasing to range from $3.65 to $3.85 per share, well below the FactSet consensus of $4.18 per share. The footwear maker's revenue outlook of $8.6 billion to $8.8 billion was shy of expectations of $8.92 billion.
Wedbush on Jan. 17 raised its price target on SKX stock to $75 from $62 on expectations for another strong year in 2024, following up its 2023 performance as "one of the best stocks" in Wedbush's coverage, analyst Tom Nikic wrote in a research note. The Skechers brand continues to show solid momentum as margins move higher and foreign-exchange trends turn more favorable. Meanwhile, Nikic sees a restocking opportunity in the company's wholesale channels. Wedbush maintained an outperform rating on the stock.
SKX Stock
Skechers tumbled 10.3% Friday to fall below its 50-day moving average. Shares dropped 10.1% premarket after closing 1.9% higher on Thursday.
SKX stock is extended following a late November breakout. Shares hit an all-time high 65.17 on Jan. 22 after vaulting about 48% in 2023.
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