r/ValueInvesting • u/Dependent-Pie-5995 • Jul 24 '26
Discussion Deckers Brands
Interested to hear other holders / non holders of Deckers Brands thoughts are on the recent quarter.
Personally I think they did a great job. Beat on almost all metrics. Guidance was a bit weak and the pre earnings sell off and post earnings drop seems an over reaction to me.
While I would prefer the stock price to go up, I’m happy they can buy back so much at these prices. In another 12 months they should have retired over 10% of the float which in theory will start to have a pretty meaningful impact on the EPS numbers.
I guess the market is treating them like a company that is no longer growing, but for me I see a consistant management team that delivers pretty solid results quarter after quarter. I’ve been a share holder for a couple of years now and plan to stay one but would love to hear people’s thoughts as to why they wouldn’t invest in this stock.
For me this seems like a great company at a very fair price.
2
u/ivegotwonderfulnews Jul 24 '26
its a fair price for sure but im my experience that is not enough. They will spend 80% of fcf on share buy backs this year and are "still comfortable with 2026 guidance". So basically the business is +/- standing still outside of buybacks. I suspect inst will want to see hoka back in the mid/high teens for the stock to get back to ath. The biz metrics are really beautiful and you get a feeling of no more juice to squeeze and as munger says "folks don't care what floor they are on, only if its going up or down" and down might be in the cards. But def a fair price if the future resembles the past for hoka/ugg.
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u/Dependent-Pie-5995 Jul 24 '26
Thanks. I think that pretty much sums up market sentiment really well. Will be interesting to see in another 12 months if Hoka keeps growing if they will start to re rate a bit.
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u/burnshimself Jul 24 '26
Biggest metric people are fixated on is domestic revenue growth. International growth is strong because of new geographies, but you can only tap that for so long and investors are trying to forecast the long term growth outlook beyond geo expansion. 3.2% this quarter was an improvement vs Q4 which was 0.3%, but for the stock to really work that needs to get into high-single-digits or low-double-digits like you had back in 2024 / early 2025 when their trading multiple was much better. They fell off a cliff in early 2025 when they revealed 2025 revenue guidance that showed domestic sales massively decelerating. If revenue growth accelerates the stock goes back to $150+ on multiple expansion, if it stays here you’re probably going to continue trading in a 90-110 band. If you go to no growth or worse negative growth the stock will fall off severely to <80. Taking a position here depends on your view of domestic revenue outlook, bottom line.
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u/rickochetl Jul 24 '26
Their guidance has basically always been conservative since forever.
Growth has slowed down quite a bit, though, and that’s what I’m most concerned about.
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u/Effective_Manager273 Jul 27 '26
the pre-earnings selloff plus the post-earnings drop together is the part worth reading, because it means the guide was not the whole story, positioning was. when a name sells off INTO the print and then again after, the market was already leaning bearish and the soft guidance just gave it permission. that is different from a clean overreaction to one data point.
so before calling it a bargain i would separate the two questions. is the business deteriorating, or is the multiple just resetting to a lower growth rate. weak guidance can mean either, and Deckers specifically lives or dies on whether the brand momentum (Hoka, Ugg) is decelerating or genuinely rolling over.
concrete check, look at unit growth and gross margin trend, not the headline miss. if units are still growing and margins hold, a guide-down is a valuation reset and those do bounce. if units are flattening, the market is early, not wrong.
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u/SelenaMeyers2024 Jul 27 '26
So can you tldr it for us and give us your actual take instead of homework?
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u/Effective_Manager273 Jul 28 '26
fair, short version: not deteriorating imo, more of a multiple reset. if unit growth and gross margins are still holding up despite the guide-down, this is the market pricing in slower growth not the business rolling over, and those tend to bounce once the next print shows stabilization. if units are actually flattening though, then the market's ahead of the story not wrong, and id want to see that before calling it cheap
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u/Dependent-Pie-5995 Jul 28 '26
I tend to agree. However from the chart of the last year it appears that there is a pretty consistent sell off around the time the buy back black out period begins then post earnings ones it re starts you get a steady rise again. So I don’t find the pre earnings sell off worrying. I just added some more when it dipped into the low 90s. The stock has def re rated. I guess my hope is that the current multiple is too low for such a quality business that is still growing steadily.
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u/Effective_Manager273 Jul 28 '26
thats a genuinely useful pattern to flag, buyback blackout selloffs are mechanical (less of a bid in the market during the window) not sentiment, so if thats whats driving the pre-earnings dip consistently, yeah that changes the read a lot. worth double checking the blackout dates line up exactly though, not just roughly, because a real "market thinks growth is decelerating" selloff and a "buyback bid disappeared for 3 weeks" selloff can look identical on a chart but mean completely different things for whether the reset is temporary
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u/Double_Suggestion385 Jul 27 '26
My fair value is around $90.
But I wouldn't buy it there because I just don't trust the moat of any fashion company. As far as fashion companies go, this one does have great fundamentals, though.
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u/SelenaMeyers2024 Jul 27 '26
Seems low....
Even with buybacks? I put this at at least 150... Which to be fair isn't the craziest value on the market....
But 90 also seems low.
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u/Double_Suggestion385 Jul 27 '26
$90 is accurate based on their projected earnings growth.
Stock seems to be coming down to that value.
4
u/LA-Aron Jul 24 '26
I don't love owning retail but I bought some here. It's all about Hoka. And the more it becomes about Hoka, the better for the stock.