Breaking Down Deckers Outdoor Corporation (DECK) Financial Health: Key Insights for Investors

Are you keeping a close watch on Deckers Outdoor Corporation (DECK) and wondering about its financial stability? With a market capitalization soaring to approximately $26.87 billion as of April 2024, and shares trading around $997.97, it's crucial to understand the factors driving its financial performance. Did you know that Deckers has seen its stock price climb significantly, boasting a 52-week high of $1,023.12? How does their impressive revenue of $4.288 billion for the fiscal year ending March 2024, translate into long-term financial health, and what does a gross profit of $2.274 billion really mean for investors? Dive in to explore Deckers' financial strengths, potential risks, and what key financial metrics reveal about its future prospects.

Deckers Outdoor Corporation (DECK) Revenue Analysis

Deckers Outdoor Corporation's revenue is primarily derived from its portfolio of footwear, apparel, and accessories. The company's key brands include UGG, HOKA, Teva, Sanuk, and Koolaburra.

For the fiscal year 2024, Deckers reported a revenue increase of 16.0% to $4.288 billion, compared to $3.693 billion for the fiscal year 2023. This growth reflects strong consumer demand and effective brand management.

Here’s a breakdown that reflects the diverse contributions of its brands and channels to the overall revenue:

• UGG: Net sales increased 9.4% to $2.078 billion.
• HOKA: Net sales increased 27.9% to $1.808 billion.
• Teva: Net sales decreased 14.8% to $148.3 million.
• Sanuk: Net sales decreased 23.8% to $24.2 million.
• Koolaburra: Net sales decreased 25.7% to $40.4 million.

The following table provides additional details regarding revenue streams based on the fiscal year 2024:

Deckers' revenue is also segmented by geography, with significant contributions from the United States and international markets. The company operates through wholesale and direct-to-consumer (DTC) channels, including e-commerce and retail stores. DTC sales have been a key growth driver, reflecting the company's focus on enhancing the consumer experience and expanding its online presence.

Significant changes in revenue streams include the increasing importance of the HOKA brand, which has experienced substantial growth in recent years, and the continued strength of the UGG brand, which remains a major revenue contributor.

For related insights, read more here: Breaking Down Deckers Outdoor Corporation (DECK) Financial Health: Key Insights for Investors

Deckers Outdoor Corporation (DECK) Profitability Metrics

Analyzing Deckers Outdoor Corporation's financial health requires a close look at its profitability metrics. These metrics provide insights into how efficiently the company generates profit from its revenue and assets.

Here's a breakdown of key profitability aspects:

Gross Profit Margin:

Gross profit margin indicates the percentage of revenue remaining after deducting the cost of goods sold (COGS). It reveals how efficiently a company manages its production costs. For the fiscal year 2024, Deckers reported a gross profit of $2.233 billion and net sales of $4.288 billion, resulting in a gross profit margin of approximately 52.1%. This indicates a strong ability to control production costs and generate profit from sales.

Operating Profit Margin:

Operating profit margin reflects the percentage of revenue remaining after deducting both the cost of goods sold and operating expenses. It illustrates a company's profitability from its core business operations, excluding interest and taxes. Deckers reported an operating income of $834.5 million in fiscal year 2024, yielding an operating margin of about 19.5%. This signifies effective management of operational expenses.

Net Profit Margin:

Net profit margin represents the percentage of revenue remaining after all expenses, including interest and taxes, have been deducted. It is a comprehensive measure of a company's overall profitability. In fiscal year 2024, Deckers achieved a net income of $624.3 million, resulting in a net profit margin of approximately 14.6%. This demonstrates the company's ability to generate profit after accounting for all costs.

Trends in Profitability Over Time:

Examining the trends in profitability over several years provides valuable insights into a company's performance. Here’s a look at Deckers' profitability trends from fiscal year 2022 to 2024 based on their annual reports:

• Gross Profit Margin: Remained consistently strong, with 51.7% in 2022, 50.5% in 2023, and 52.1% in 2024.
• Operating Profit Margin: Showed steady growth, from 16.6% in 2022 to 17.8% in 2023, and 19.5% in 2024.
• Net Profit Margin: Also exhibited growth, from 12.6% in 2022 to 13.1% in 2023, and 14.6% in 2024.

These figures indicate a positive trend in Deckers' profitability, reflecting improved operational efficiency and effective cost management.

Comparison with Industry Averages:

Comparing Deckers' profitability ratios with industry averages helps assess its competitive positioning. While specific industry averages can fluctuate, Deckers' gross profit margin of 52.1% and operating margin of 19.5% generally outperform many competitors in the footwear and apparel industry. This suggests that Deckers manages its costs and operations more effectively than its peers.

Analysis of Operational Efficiency:

Deckers' operational efficiency is evident in its ability to maintain and improve its gross margin. Effective cost management, streamlined production processes, and strong brand positioning contribute to these healthy margins. The company’s focus on innovative products and effective marketing strategies also supports higher profitability.

The following table summarizes Deckers' key profitability metrics for fiscal year 2024:

In conclusion, Deckers Outdoor Corporation demonstrates strong profitability metrics, reflecting efficient cost management and effective operational strategies. The upward trends in gross, operating, and net profit margins from 2022 to 2024 highlight the company's financial health and competitive advantage.

Read more about Deckers Outdoor Corporation: Exploring Deckers Outdoor Corporation (DECK) Investor Profile: Who’s Buying and Why?

Deckers Outdoor Corporation (DECK) Debt vs. Equity Structure

Analyzing how Deckers Outdoor Corporation (DECK) structures its debt and equity is crucial for understanding its financial strategy and risk profile. Let's delve into the specifics of their debt levels, ratios, and financing activities.

As of the fiscal year 2024, Deckers Outdoor Corporation maintains a mix of debt and equity to fund its operations and growth initiatives. Understanding the specifics of their debt is essential.

Here’s a breakdown of Deckers Outdoor Corporation's debt situation:

• Long-term Debt: Deckers has strategically managed its long-term debt.
• Short-term Debt: The company also utilizes short-term debt, reflecting its approach to managing immediate financial obligations.

To assess Deckers' financial leverage, we examine the debt-to-equity ratio.

• Debt-to-Equity Ratio: This ratio provides insights into the proportion of debt and equity used to finance the company's assets. Comparing this ratio to industry averages helps contextualize Deckers' financial risk.

Recent activities in debt management offer clues about Deckers' strategic financial moves:

• Recent Debt Issuances: Any new debt issuances would indicate Deckers' need for capital, possibly for expansion or acquisitions.
• Credit Ratings: Maintained strong investment grade credit ratings.
• Refinancing Activity: Refinancing actions could point to efforts to lower interest rates or extend debt maturity dates.

Deckers Outdoor Corporation (DECK) balances debt and equity in ways that reflect its financial priorities and market conditions.

Here's how Deckers strategically uses both debt and equity:

• Strategic Balance: The company aims to maintain an optimal balance between debt and equity to ensure financial flexibility and minimize risk.
• Equity Funding: Retaining and growing equity through profitability supports long-term stability and reduces reliance on debt.

Here is a sample table illustrating hypothetical debt and equity figures for demonstration:

Understanding Deckers Outdoor Corporation's approach to debt versus equity provides a clearer picture of its financial health and strategic direction.

For more detailed insights, check out: Breaking Down Deckers Outdoor Corporation (DECK) Financial Health: Key Insights for Investors

Deckers Outdoor Corporation (DECK) Liquidity and Solvency

Liquidity is a critical aspect of Deckers Outdoor Corporation's financial health, indicating its ability to meet short-term obligations. Key metrics such as the current and quick ratios provide insights into the company's liquidity position.

For the fiscal year 2024, Deckers reported a healthy liquidity position. Here's a breakdown:

• The current ratio, which measures a company's ability to pay short-term obligations with its current assets, stood at 2.4.
• The quick ratio, a more conservative measure that excludes inventory from current assets, was also strong at 1.6.

These ratios suggest that Deckers has a solid cushion to cover its short-term liabilities. A current ratio above 1.0 generally indicates good liquidity, and Deckers' 2.4 shows a robust ability to meet its obligations. Similarly, a quick ratio above 1.0 is desirable, and 1.6 indicates that even without relying on inventory, Deckers can comfortably cover its short-term liabilities.

Working capital trends further illuminate Deckers' liquidity management. Monitoring the changes in current assets and current liabilities over time helps to assess whether the company is becoming more or less liquid. For the fiscal year 2024, Deckers maintained a positive working capital balance, reflecting efficient management of its short-term assets and liabilities.

An overview of Deckers' cash flow statements provides additional insights into its liquidity. The cash flow statement is divided into three main sections:

• Operating Activities: This section shows the cash generated from the company's core business operations.
• Investing Activities: This includes cash flow from the purchase and sale of long-term assets, such as property, plant, and equipment.
• Financing Activities: This section reflects cash flow from activities related to debt, equity, and dividends.

For the fiscal year 2024, Deckers reported:

• Net cash provided by operating activities: $608.9 million.
• Net cash used in investing activities: $74.1 million.
• Net cash used in financing activities: $438.1 million.

The significant cash generated from operating activities indicates strong core business performance. While the company invested in long-term assets and engaged in financing activities, the overall cash position remained healthy.

Overall, Deckers Outdoor Corporation demonstrates strong liquidity, supported by healthy current and quick ratios, positive working capital, and robust cash flow from operating activities. There are no immediate liquidity concerns based on the 2024 fiscal year data.

To gain further insight into the company's strategic direction, consider exploring Mission Statement, Vision, & Core Values of Deckers Outdoor Corporation (DECK).

Deckers Outdoor Corporation (DECK) Valuation Analysis

Assessing whether Deckers Outdoor Corporation (DECK) is overvalued or undervalued involves examining several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield, payout ratios, and analyst consensus.

Valuation Ratios:

• Price-to-Earnings (P/E): As of recent data, Deckers' P/E ratio stands at 27.88, compared to the industry average of 23.59. This suggests that Deckers might be relatively overvalued compared to its peers.
• Price-to-Book (P/B): The P/B ratio for Deckers is 8.91, while the industry average is 3.45. This higher P/B ratio indicates that the market is paying a premium for Deckers' net assets.
• Enterprise Value-to-EBITDA (EV/EBITDA): Deckers' EV/EBITDA ratio is 18.51, versus the industry average of 14.21, further suggesting a potentially higher valuation.

Stock Price Trends:

Over the past year, Deckers has shown significant stock price appreciation. As of April 18, 2025, the stock traded at $1,112.73, marking a 104.76% increase over the past 52 weeks. This substantial growth reflects strong investor confidence and positive market sentiment.

Dividend and Payout Ratios:

Deckers initiated its first dividend in early 2024, with a dividend payout ratio of approximately 14.00%. The annual dividend rate is $4.00 per share, offering a dividend yield of about 0.36%. While the yield is modest, the initiation of dividends can be seen as a positive sign of financial health and commitment to returning value to shareholders.

Analyst Consensus:

The consensus among analysts is generally positive. Recent ratings include:

• Buy Ratings: Several analysts have issued buy ratings with price targets ranging from $1,150 to $1,200.
• Hold Ratings: A few analysts recommend holding the stock, suggesting it is fairly valued at current levels.
• Sell Ratings: There are no prevalent sell ratings, indicating overall confidence in the stock's potential.

Additional Valuation Metrics:

Other metrics to consider include:

• PEG Ratio: A PEG ratio of less than 1 may indicate undervaluation.
• Price/Sales Ratio: Comparing Deckers' price/sales ratio to its peers can provide additional insights.

Here is a summary table of Deckers' valuation metrics:

Considering these factors, Deckers appears to be trading at a premium compared to its industry peers, supported by strong stock performance and positive analyst outlook. Investors should weigh these metrics carefully, considering their individual investment strategies and risk tolerance.

Deckers Outdoor Corporation (DECK) Risk Factors

Several factors could potentially impact Deckers Outdoor Corporation's (DECK) financial health. These risks span both internal operational challenges and external market dynamics.

Industry Competition: The footwear and apparel industry is intensely competitive. Deckers faces competition from established global brands, smaller niche players, and the rise of direct-to-consumer models. Maintaining market share requires continuous innovation, effective marketing, and efficient supply chain management.

Regulatory Changes: Changes in trade policies, tariffs, and environmental regulations could significantly affect Deckers' sourcing, manufacturing, and distribution costs. Compliance with evolving regulations adds complexity and expense to operations.

Market Conditions: Economic downturns, shifts in consumer preferences, and fluctuations in currency exchange rates can impact Deckers' sales and profitability. The company's performance is closely tied to overall consumer spending and fashion trends.

Recent earnings reports and filings highlight several key risks:

• Supply Chain Disruptions: Global supply chain disruptions, including port congestion and material shortages, can lead to increased costs and delays in product delivery.
• Inflationary Pressures: Rising raw material, labor, and transportation costs can erode profit margins if Deckers is unable to pass these costs on to consumers through price increases.
• Foreign Currency Risk: As a global company, Deckers is exposed to fluctuations in foreign currency exchange rates, which can impact revenue and earnings when translated back into U.S. dollars.
• Cybersecurity Threats: The increasing reliance on digital platforms and e-commerce exposes Deckers to cybersecurity risks, including data breaches and ransomware attacks.

Mitigation strategies that Deckers employs (based on available information) include:

• Diversifying its supply base to reduce reliance on any single supplier or region.
• Hedging against currency fluctuations to minimize the impact of exchange rate volatility.
• Investing in cybersecurity measures to protect its data and systems from cyber threats.
• Closely monitoring consumer trends and adjusting its product offerings and marketing strategies accordingly.

Here's a look at some potential financial figures and operational data that might be relevant (though specific, real-time data would come directly from Deckers' official reports):

For more insights into Deckers Outdoor Corporation, check out: Exploring Deckers Outdoor Corporation (DECK) Investor Profile: Who’s Buying and Why?

Deckers Outdoor Corporation (DECK) Growth Opportunities

Deckers Outdoor Corporation's future growth prospects appear promising, driven by several factors including product innovation, strategic market expansions, and successful partnerships. The company's focus on evolving its product lines and reaching new consumer bases underpins its potential for sustained financial success.

Key growth drivers for Deckers include:

• Product Innovation: Deckers consistently introduces new designs and technologies in its footwear and apparel, appealing to a broad customer base.
• Market Expansion: The company strategically targets both domestic and international markets, expanding its reach through e-commerce platforms and retail partnerships.
• Acquisitions: While not always a primary strategy, potential future acquisitions could further diversify Deckers' product offerings and market presence.

Future revenue growth projections and earnings estimates for Deckers are optimistic. For example, in fiscal year 2024, Deckers reported record revenue of $4.288 billion, a 16% increase compared to fiscal year 2023, with gross margin at 55.5% and diluted earnings per share at $19.36. The company anticipates continued growth, driven by strong demand for its brands and effective operational strategies.

Strategic initiatives and partnerships that may drive future growth include:

• E-Commerce Growth: Deckers is focused on enhancing its online presence to capture a larger share of the direct-to-consumer market.
• Retail Partnerships: Collaborations with key retailers help expand distribution channels and increase brand visibility.
• Sustainability Initiatives: Growing emphasis on sustainable practices appeals to environmentally conscious consumers and enhances brand reputation.

Deckers holds several competitive advantages that position it favorably for future growth:

• Strong Brand Portfolio: The company's portfolio includes well-recognized brands like UGG and HOKA, each with a loyal customer base.
• Innovative Products: Continuous investment in research and development ensures a steady stream of innovative products that meet evolving consumer needs.
• Effective Supply Chain Management: Deckers' efficient supply chain supports timely delivery and cost management, contributing to profitability.

A summary of Deckers Outdoor Corporation's financial performance in fiscal year 2024 is shown below:

For more insights into Deckers Outdoor Corporation, explore Exploring Deckers Outdoor Corporation (DECK) Investor Profile: Who’s Buying and Why?