Deckers falls as analysts flag tougher June trends; drags down footwear peers

On Holding AG

10/07/2024 17:28

(Updates)
    ** Shares of footwear maker Deckers Outdoor  DECK.N  down as
much as 9.2% at $853.07; on track for their worst day since
March 2020
    ** BofA analyst Christopher Nardone says UGG boots maker
will see a strong Q1 but business to get tougher Q2 onward
    ** M Science says its U.S. digital purchase data suggests a
marked step-down in growth of DECK's HOKA sneakers in the DTC
channel in June, as well moderating trends for UGG boots
        ** "While less impactful than the HOKA step-down given
UGG's seasonality, recent softening for the latter brand also
weighs on our outlook" - analyst Drake MacFarlane
  
    ** Nardone says Q1 is "likely the last quarter UGG will
benefit materially from prior price increases and much lower
discounting year-over-year"
    ** DECK is the biggest loser on S&P 500  .SPX  index, drags
down footwear peers
        ** On Holdings  ONON.N  slips 1.3%, Crocs  CROX.O  down
3%, Skechers  SKX.N  dips 2.2%, while Lululemon  LULU.O  down
1.8%
  
    ** "Beyond Q1, we think much more difficult comparisons for
UGG and the continued competitive dynamic in specialty run will
temper the magnitude of beats needed to drive the multiple
higher" - BofA in a client note 
    ** Out of 22 brokerages covering DECK, 16 rate it "buy" or
higher, five "hold" and one "sell"; their median PT is $1,089
    ** DECK is up 28% this year, including session's moves

 (Reporting by Savyata Mishra in Bengaluru)
 ((Savyata.Mishra@thomsonreuters.com))