Best Consumer Companies For 2015

Best Consumer Companies For 2015: Deckers Outdoor Corporation(DECK)

Deckers Outdoor Corporation engages in the design, manufacture, and marketing of footwear and accessories for outdoor activities and casual lifestyle use to men, women, and children. The company offers luxury footwear and accessories under the UGG brand name; high performance multi-sport shoes, rugged outdoor footwear, and sport sandals under the Teva brand name; casual and sustainable-lifestyle sneakers and accessories under the Simple brand name; casual footwear under the TSUBO brand name; and outdoor performance and lifestyle footwear under the Ahnu brand name. Its accessories include handbags and cold weather outerwear. The company sells its products primarily to specialty retailers, department stores, outdoor retailers, sporting goods retailers, shoe stores, and online retailers. Deckers Outdoor Corporation also sells its products directly to end-user consumers through its Web sites, call centers, retail concept stores, and retail outlet stores, as well as through ret ailers in the United States. In addition, the company distributes its products through independent distributors and retailers in Europe, Canada, Australia, Asia, and Latin America. It has a joint venture with Stella International Holdings Limited for the opening of retail stores and wholesale distribution for the UGG brand in China. Deckers Outdoor Corporation was founded in 1973 and is headquartered in Goleta, California.

Advisors' Opinion:

• [By Eric Volkman]

  Getty Images/Scott Olson The demise of Crocs (CROX), it seems, may have been greatly exaggerated. Remember the company's signature product? Close to a decade ago, those colorful, clunky resin clogs were all the rage. The company that made them couldn't sell the things fast enough, at one point reaching sales of 50 million pairs in 2007. Then fashion moved on, as it always does, and the economic slowdown started to bite into sales. Crocs plunged from a $168 mill! ion net profit in 2007 to a $185 million loss in 2008. In 2009, the company nearly ran out of cash and had a hard time making payroll. But Crocs' fortunes have improved. In its most recent quarter, the firm posted a loss, but it was narrower than the market was expecting. And it's found an investor that believes in its future -- private equity giant Blackstone Group (BX), which recently provided a $200 million cash investment in return for a block of preferred shares eventually convertible into a stake of around 13 percent of the company. Perhaps the time has come to take those old clogs out of the closet, dust them off, and slip them on for a stroll. Stepping It Up Fashion is highly susceptible to consumer whim. The hot item is never hot for very long, and once consumers move on, it can be hard for the company to recover. In Crocs' case, this was exacerbated by its limited product line -- almost exclusively the clogs. The company learned from its mistakes. Since consumer tastes moved out of clog-land, Crocs has significantly broadened its product line to 300 styles. It now offers boots, flip-flops, deck shoes and slip-ons akin to the casuals from VF Corp.'s (VFC) Vans subsidiary. In terms of profitability, Crocs recovered quickly from its time in the fashion wilderness. From that 2008 bottom-line deficit of $185 million, the company sliced its loss to $42 million the following year, then stepped back into the black in 2010 (to the tune of $68 million). After two straight years of declines, revenue

• [By Ben Levisohn]

  Yesterday, we asked if cold-weather demand for Ugg boots would boost Deckers Outdoor (DECK) financial results during the fourth quarter. We asked the wrong question.

  EPA

  Deckers fourth-quarter results were warm and fuzzy. The footwear company said it earned $4.04 a share, beating the Street’s consensus for $3.80. The guidance for 2014 was well below analyst forecasts, however, so down goes the stock.

  Canaccord Genuity’s Camilo Lyon and! Patrick ! O’Brien call the guidance “highly conservative.” They explain:

  2014 guidance underwhelmed (implied EPS of $4.54 vs. our/consensus estimates of $5.22/$4.70), leaving us (and others) speculating about the level of conservatism embedded in it. Most notably, backlogs are up 24% at Dec. 31 (consistent with our channel/industry checks), yet it is less than 50% complete. Given that all retailers had a solid season with UGG, we have no reason to believe the remaining orders will change dramatically from those already in the book; thus making the 10% sales growth guide (and implied 4% wholesale growth), highly conservative we believe.

  Lyon and O’Brien did, however, lower their price target on Deckers Outdoor to $103 from $111 to account for the lower forecast and higher expenses.

  Shares of Deckers Outdoor have dropped 13% to $73.90, while Crocs (CROX) has gained 0.8% to $15.24, Steve Madden (SHOO) has dropped 0.1% to $36.52, Wolverine World Wide (WWW) has fallen 1.2% to $126.36 and Skechers (SKX) has fallen 1.6% to $33.82.

• [By Bill Maurer]

  Deckers Outdoor (DECK):

  I covered Deckers in the above mentioned earnings season uncertainty article, mentioning that the UGG maker has been off to the races lately. Deckers jumped nicely on Wednesday, after a Piper Jaffray survey found that UGGs are still reasonating with upper income teens. However, while upping their price target and earnings estimates on the name, the firm maintained their Neutral rating on the stock. Also, their price target is $48, about $10 below where we are currently.

source from Top Stocks To Buy For 2015:http://www.topstocksforum.com/best-consumer-companies-for-2015-2.html