Skechers (SKX) and Hoka maker Deckers Outdoor (DECK) moved in opposite directions after releasing their latest quarterly reports on Thursday. While DECK stock soared to new all-time highs, SKX stock plummeted from its record levels.
Deckers: Hoka-Powered Earnings
Deckers reported a 44% increase in Q3 adjusted earnings to a record $15.11 per share. The company’s revenue grew by 16% to a record $1.56 billion, a slower rate after a period of accelerating gains over the past few quarters. FactSet had anticipated a 9.5% earnings increase to $11.48 per share on 8% revenue growth to $1.45 billion.
Direct-to-consumer net sales for Deckers spiked 22.7% to $858.1 million, with comparable DTC sales increasing by 21.8%. The company’s wholesale revenue rose by 8.6% to $702.2 million. Deckers’ gross margin improved to 58.7% for the quarter from 53%.
Sales of the Hoka brand increased by 21.9% to $429.3 million, reflecting the largest sales increase for Deckers, while Ugg brand revenue grew by 15.2% to $1.07 billion. However, Teva and Sanuk shoe sales declined by 16.2% and 28.9% respectively.
For 2024, Deckers expects adjusted earnings to increase by around 36% to range from $26.25 to $26.50 per share and foresees full-year revenue growing by 14% to $4.15 billion. FactSet analysts predict 2024 earnings of $24.18 per share on $4.1 billion in sales.
Telsey Advisory raised its price target on DECK stock to $850 from $800, while Truist increased its price target to $859 from $790. Both firms are optimistic about Hoka and Ugg brand sales and Deckers’ wholesale prospects, with Ugg direct-to-consumer sales trending above expectations.
Deckers Stock
Deckers Outdoor surged 8% early on Friday to a new record high after a premarket rally of more than 10%. The stock saw a 2.5% increase on Thursday following a more than 2% drop on Wednesday. DECK stock reached its prior all-time high of $776.07 on Tuesday and has seen a 15.5% rally so far this year through Thursday, following a nearly 68% increase in 2023.
Skechers
Skechers reported a 16.7% increase in adjusted earnings to 56 cents per share for its Q4 results. Fourth-quarter revenue rose by 4.4% to $1.96 billion after reporting an approximate 8% increase over the past two quarters. FactSet analysts had expected adjusted earnings of 55 cents per share on $2.03 billion in sales.
For the full year, Skechers’ earnings jumped by 46.6% to $3.49 per share while revenue rose by 7.5% to a record $8 billion, in-line with expectations of $3.48 per share on $8.07 billion in sales.
The company’s Q1 earnings guidance of $1.05 to $1.10 per share was below FactSet estimates of $1.20 per share, with a revenue outlook ranging from $2.175 billion to $2.225 billion, compared to Wall Street views of $2.19 billion. Skechers anticipates 2024 earnings to range from $3.65 to $3.85 per share, below the FactSet consensus of $4.18 per share, with a revenue outlook of $8.6 billion to $8.8 billion, shy of expectations of $8.92 billion.
Wedbush raised its price target on SKX stock to $75 from $62, expecting strong performance in 2024 following a successful 2023. The Skechers brand continues to exhibit positive momentum, and Wedbush sees a restocking opportunity in the company’s wholesale channels. SKX Stock
Skechers tumbled by 8.2% on Friday morning to fall below its 50-day moving average, with a premarket drop of 10.1% after closing 1.9% higher on Thursday. SKX stock hit an all-time high of $65.17 on Jan. 22 after rising by approximately 48% in 2023.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
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