Please ensure Javascript is enabled for purposes of website accessibility

Why Deckers Outdoor Corp. Stock Tumbled Today

By Jeremy Bowman - Updated Feb 3, 2017 at 12:47PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Ugg maker tumbled after a poor earnings report and weak guidance.

A pair of gray Ugg boots

Image source: Ugg.

What happened

Shares of Deckers Outdoor Corp. (DECK 1.32%) were slipping today after the Ugg maker reported disappointing third-quarter earnings. As of 11:58 a.m. EST, the stock was down 16.8%.

So what 

The holiday-season quarter is the most important one for Deckers as its sheepskin boots are popular in winter, but its results came up short. Earnings per share fell from $4.78 to $4.11, missing estimates of $4.24. Revenue was down as well, decreasing 4.5% to $760.3 million. That also did not meet expectations of $786.8 million. Ugg sales, which make up the vast majority of overall sales, were down 5.3%. CEO Dave Powers said the company experienced a "slow start to the holiday season, but sell-through accelerated sharply late in the quarter." In December, direct-to-consumer comparable sales increased 4.7%, a sign of positive momentum.

Now what 

Deckers' outlook for the fourth quarter and the full year was also weak, further pressuring the stock. The company expects sales to fall 5-6% in the current quarter, and a per-share loss of $0.11 to $0.10. 

Wall Street, on the other hand, expected revenue growth of 1%-2% and a per-share profit of $0.44, much better than the new guidance.

Deckers stock has been volatile for several years as its trademark Ugg boots move in and out of fashion. With its current guidance and the fact that the company hasn't come up with a stable growth model, this stock may be best avoided.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Deckers Outdoor. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Deckers Outdoor Corporation Stock Quote
Deckers Outdoor Corporation
DECK
$333.38 (1.32%) $4.33

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/13/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.