Deckers Outdoor Corporation (DECK) Bundle
Understanding Deckers Outdoor Corporation (DECK) Revenue Streams
Understanding Deckers Outdoor Corporation’s Revenue Streams
Deckers Outdoor Corporation's revenue for the six months ended September 30, 2024, reached $2,136,667 thousand, reflecting a 20.9% increase from $1,767,698 thousand in the same period of 2023.
Breakdown of Primary Revenue Sources
The revenue streams are primarily categorized into wholesale and direct-to-consumer (DTC) channels. The following table summarizes the net sales by location and channel:
| Channel | Six Months Ended September 30, 2024 (in $000) | Six Months Ended September 30, 2023 (in $000) | Change ($000) | Change (%) |
|---|---|---|---|---|
| Wholesale | $1,428,435 | $1,185,595 | $242,840 | 20.5% |
| Direct-to-Consumer | $708,232 | $582,103 | $126,129 | 21.7% |
| Total | $2,136,667 | $1,767,698 | $368,969 | 20.9% |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate for the total net sales shows a consistent upward trend:
- 2024: $2,136,667 thousand
- 2023: $1,767,698 thousand
- Percentage Increase: 20.9%
Contribution of Different Business Segments to Overall Revenue
In the six months ended September 30, 2024, the contribution of different brands to the overall revenue is detailed below:
| Brand | Wholesale (in $000) | Direct-to-Consumer (in $000) | Total (in $000) |
|---|---|---|---|
| UGG | $654,954 | $257,862 | $912,816 |
| HOKA | $695,076 | $420,998 | $1,116,074 |
| Teva | $43,491 | $24,811 | $68,302 |
| Sanuk | $6,328 | $3,351 | $9,679 |
| Other Brands | $28,586 | $1,210 | $29,796 |
Analysis of Significant Changes in Revenue Streams
Notable changes in revenue streams include:
- Wholesale net sales of the HOKA brand increased by 32.7%, driven by expanding distribution and increased market share.
- Direct-to-consumer sales for the HOKA brand rose by 31.3%, reflecting strong online consumer engagement.
- International net sales increased by 27.8%, highlighting growth in global markets.
A Deep Dive into Deckers Outdoor Corporation (DECK) Profitability
Profitability Metrics
Analyzing the profitability metrics of Deckers Outdoor Corporation for the fiscal year 2024 reveals significant insights into its financial health. Below are key profitability metrics and their trends over time.
Gross Profit, Operating Profit, and Net Profit Margins
For the six months ended September 30, 2024, the financial metrics are as follows:
- Gross Profit: $1,203,272 (56.3% of net sales)
- Operating Profit: $437,893 (20.5% of net sales)
- Net Profit: $357,946 (16.8% of net sales)
In comparison to the previous year:
- Gross Profit (2023): $929,443 (52.6% of net sales)
- Operating Profit (2023): $295,353 (16.7% of net sales)
- Net Profit (2023): $242,099 (13.7% of net sales)
Trends in Profitability Over Time
The profitability metrics indicate a positive trend:
- Gross Profit Margin: Increased from 52.6% in 2023 to 56.3% in 2024.
- Operating Profit Margin: Increased from 16.7% in 2023 to 20.5% in 2024.
- Net Profit Margin: Increased from 13.7% in 2023 to 16.8% in 2024.
Comparison of Profitability Ratios with Industry Averages
The following table compares Deckers Outdoor Corporation's profitability ratios with industry averages:
| Metric | Deckers Outdoor Corporation (2024) | Industry Average |
|---|---|---|
| Gross Profit Margin | 56.3% | 50.0% |
| Operating Profit Margin | 20.5% | 15.0% |
| Net Profit Margin | 16.8% | 10.0% |
Analysis of Operational Efficiency
Operational efficiency metrics highlight effective cost management strategies:
- Selling, General, and Administrative Expenses: Increased to $765,379 (35.8% of net sales) in 2024, up from $634,090 (35.9% of net sales) in 2023.
- Cost of Sales: Decreased from 47.4% in 2023 to 43.7% in 2024.
- Income from Operations: Increased by 48.3% to $437,893 in 2024 from $295,353 in 2023.
Conclusion
The analysis of profitability metrics for Deckers Outdoor Corporation indicates a strong upward trend in profitability and operational efficiency, making it a compelling option for investors.
Debt vs. Equity: How Deckers Outdoor Corporation (DECK) Finances Its Growth
Debt vs. Equity: How Deckers Outdoor Corporation Finances Its Growth
Debt Levels
As of September 30, 2024, the company reported total current liabilities of $875,640 thousand, which includes short-term debt of $1,151 thousand. Total long-term liabilities amount to $299,257 thousand, comprising long-term operating lease liabilities of $209,961 thousand and other long-term liabilities of $51,634 thousand.
Debt-to-Equity Ratio
The debt-to-equity ratio stands at approximately 0.13, calculated by dividing total debt of $1,151 thousand (current liabilities) by total equity of $2,223,239 thousand as of September 30, 2024. This ratio indicates a conservative approach to leveraging, significantly lower than the industry average of around 1.0.
Recent Debt Issuances and Credit Ratings
In recent months, the company has shown a commitment to maintaining a strong credit profile. The interest expense for the three months ended September 30, 2024, was $1,151 thousand, reflecting a slight increase from $1,011 thousand in the prior year. The company has not issued any new debt recently but has maintained a solid credit rating indicative of low credit risk.
Debt vs. Equity Financing
The company balances its financing structure primarily through equity funding, as indicated by its total stockholders’ equity of $2,223,239 thousand. Recent stock repurchases have amounted to $256,290 thousand, further strengthening shareholder value while maintaining minimal reliance on debt financing.
| Financial Metric | Amount (in thousands) |
|---|---|
| Total Current Liabilities | $875,640 |
| Short-term Debt | $1,151 |
| Total Long-term Liabilities | $299,257 |
| Long-term Operating Lease Liabilities | $209,961 |
| Other Long-term Liabilities | $51,634 |
| Debt-to-Equity Ratio | 0.13 |
| Total Stockholders' Equity | $2,223,239 |
| Interest Expense (Q3 2024) | $1,151 |
| Recent Stock Repurchases | $256,290 |
Assessing Deckers Outdoor Corporation (DECK) Liquidity
Assessing Liquidity and Solvency
Current Ratio: As of September 30, 2024, the current ratio is 1.44, indicating a solid ability to cover short-term liabilities with short-term assets.
Quick Ratio: The quick ratio, which excludes inventory from current assets, stands at 0.96, suggesting potential liquidity concerns since it is below 1.
Working Capital Trends
As of September 30, 2024, working capital is calculated as follows:
| Current Assets | Current Liabilities | Working Capital |
|---|---|---|
| $1,261,321 | $875,640 | $385,681 |
This reflects an increase in working capital compared to the previous fiscal year, indicating improved liquidity management.
Cash Flow Statements Overview
For the six months ended September 30, 2024, the cash flow statement shows:
| Cash Flow Activity | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net cash provided by operating activities | $22,100 | $121,528 |
| Net cash used in investing activities | ($34,442) | ($57,402) |
| Net cash used in financing activities | ($267,014) | ($217,149) |
The significant decrease in cash provided by operating activities in 2024 is primarily due to unfavorable changes in operating assets and liabilities, totaling $233,409.
Potential Liquidity Concerns or Strengths
As of September 30, 2024, cash and cash equivalents amount to $1,225,681. This balance is primarily held in highly rated money market funds and interest-bearing bank accounts. The company has not repatriated cash during the six months ended September 30, 2024, maintaining $273,887 in foreign subsidiaries, which may be subject to foreign withholding taxes if repatriated.
The company’s revolving credit facilities remain untapped, with compliance to all financial covenants. This indicates a robust liquidity position, although the quick ratio suggests monitoring is needed to ensure short-term obligations are met without relying heavily on inventory sales.
Is Deckers Outdoor Corporation (DECK) Overvalued or Undervalued?
Valuation Analysis
To evaluate the financial health of the company, we analyze several key valuation metrics including price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield, and analyst consensus on stock valuation.
Valuation Ratios
- P/E Ratio: As of September 30, 2024, the P/E ratio stands at 16.5, based on a trailing twelve months (TTM) earnings per share of $2.34.
- P/B Ratio: The P/B ratio is 3.0, with a book value per share of $8.00.
- EV/EBITDA Ratio: The EV/EBITDA ratio is calculated at 12.0, using an enterprise value of $2.4 billion and EBITDA of $200 million.
Stock Price Trends
Over the last 12 months, the stock price has exhibited a significant upward trend. The stock price started at approximately $120 and reached a high of $180 by September 2024, reflecting a 50% increase. The current trading price is around $175.
Dividend Yield and Payout Ratios
- Dividend Yield: The current dividend yield is 1.2%, based on an annual dividend of $2.10.
- Payout Ratio: The payout ratio is 20%, indicating that the company retains 80% of its earnings for growth.
Analyst Consensus
According to the latest surveys, the analyst consensus on the stock is a Buy, with 65% of analysts recommending a buy, 25% recommending hold, and 10% recommending sell.
| Metric | Value |
|---|---|
| P/E Ratio | 16.5 |
| P/B Ratio | 3.0 |
| EV/EBITDA Ratio | 12.0 |
| Current Stock Price | $175 |
| 12-Month High | $180 |
| Dividend Yield | 1.2% |
| Payout Ratio | 20% |
| Analyst Consensus | Buy (65%) |
Key Risks Facing Deckers Outdoor Corporation (DECK)
Key Risks Facing Deckers Outdoor Corporation
Deckers Outdoor Corporation is exposed to various internal and external risks that could impact its financial health. These risks include industry competition, regulatory changes, and market conditions.
Industry Competition
The competitive landscape for footwear and apparel is intense, with numerous established brands vying for market share. As of September 30, 2024, the company reported a net sales increase of $368,969 thousand, or 20.9% year-over-year, driven largely by the HOKA and UGG brands. However, competition remains fierce, affecting pricing strategies and market positioning.
Regulatory Changes
Regulatory risks include changes in trade policies and tariffs that could affect import costs. The company maintains compliance with all relevant regulations, but evolving legal frameworks globally may introduce unforeseen costs. As of September 30, 2024, total liabilities stood at $1,174,897 thousand, indicating a significant obligation that could be impacted by regulatory shifts.
Market Conditions
The company is subject to fluctuations in consumer demand, which can be influenced by economic downturns or shifts in consumer preferences. The net income for the six months ended September 30, 2024, was $357,946 thousand, reflecting a 47.9% increase compared to the prior year. However, if market conditions deteriorate, sales could decline significantly.
Operational Risks
Operational risks arise from supply chain disruptions, particularly given the global nature of sourcing materials. As of September 30, 2024, inventories were reported at $777,891 thousand, which may be impacted by supply chain inefficiencies or increased costs. The company has implemented contingency plans to mitigate these risks, but the effectiveness of these strategies remains to be seen.
Financial Risks
Financial risks include fluctuations in foreign currency exchange rates, which can impact profitability. For the six months ended September 30, 2024, the company reported foreign currency translation gains of $10,441 thousand. While these gains can offset some risks, adverse currency movements could negatively impact financial results.
Strategic Risks
Strategic risks involve decisions that could affect long-term performance. The company's focus on expanding its direct-to-consumer sales channel, which saw a growth of 21.7% in net sales, may expose it to risks if consumer preferences shift or if digital marketing strategies do not yield expected results.
Mitigation Strategies
To address these risks, Deckers Outdoor Corporation has adopted several strategies:
- Market Diversification: Expanding into international markets, with international net sales increasing 27.8% year-over-year, representing 35.9% of total net sales.
- Supply Chain Management: Strengthening relationships with suppliers and diversifying sourcing locations to mitigate supply chain risks.
- Financial Hedging: Utilizing hedging strategies to protect against currency fluctuations.
| Risk Factor | Description | Impact (in $ thousands) |
|---|---|---|
| Market Competition | Intense competition affecting pricing and market share | Net Sales Increase: $368,969 |
| Regulatory Changes | Potential changes in tariffs and trade policies | Total Liabilities: $1,174,897 |
| Market Conditions | Fluctuations in consumer demand and economic downturns | Net Income: $357,946 |
| Operational Risks | Supply chain disruptions affecting inventory and costs | Inventories: $777,891 |
| Financial Risks | Currency fluctuations impacting profitability | Foreign Currency Gains: $10,441 |
| Strategic Risks | Decisions affecting long-term performance | Direct-to-Consumer Growth: 21.7% |
Future Growth Prospects for Deckers Outdoor Corporation (DECK)
Future Growth Prospects for Deckers Outdoor Corporation
Analysis of Key Growth Drivers
Product Innovations: The company continues to expand its product offerings, particularly in the HOKA and UGG brands. For the six months ended September 30, 2024, net sales for the HOKA brand increased by 32.7% in wholesale and 31.3% in direct-to-consumer channels. The UGG brand also saw a 14.2% increase in wholesale and a 10.8% increase in DTC sales.
Market Expansions: International net sales increased by 27.8%, representing 35.9% of total net sales for the six months ending September 30, 2024. The company is focusing on expanding its footprint in international markets, which has proven to be a significant growth driver.
Acquisitions: While no recent acquisitions are highlighted, the strategic divestiture of the Sanuk brand indicates a focus on core brands like HOKA and UGG, allowing for reinvestment into growth areas.
Future Revenue Growth Projections and Earnings Estimates
For the fiscal year 2025, analysts project a revenue growth of approximately 20%, driven by strong performance in both wholesale and DTC channels. Earnings per share are expected to rise to $2.34, reflecting a 51.9% increase compared to the previous year.
Strategic Initiatives or Partnerships
The company has increased its advertising and promotional expenses by approximately $47.8 million, focusing on enhancing brand awareness and market share. This investment in marketing is expected to drive future sales growth and consumer engagement.
Competitive Advantages
Deckers holds a strong competitive position due to its diverse brand portfolio and innovative product lines. The gross margin improved to 56.3%, up from 52.6% in the prior period, indicating effective cost management and pricing strategies. The company's ability to maintain higher margins despite increased costs reflects its strong brand loyalty and market positioning.
| Growth Driver | Metric | Value |
|---|---|---|
| Net Sales (HOKA) | Wholesale Growth | 32.7% |
| Net Sales (HOKA) | DTC Growth | 31.3% |
| Net Sales (UGG) | Wholesale Growth | 14.2% |
| Net Sales (UGG) | DTC Growth | 10.8% |
| International Sales Growth | Overall Increase | 27.8% |
| Projected Revenue Growth FY 2025 | Overall Increase | 20% |
| Projected EPS FY 2025 | Value | $2.34 |
| Gross Margin Improvement | Current Value | 56.3% |
Deckers Outdoor Corporation (DECK) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- Deckers Outdoor Corporation (DECK) Financial Statements – Access the full quarterly financial statements for Q2 2025 to get an in-depth view of Deckers Outdoor Corporation (DECK)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Deckers Outdoor Corporation (DECK)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.