In the last quarter, shares of Deckers Outdoors (DECK) , currently at $57, fell 17%. From the look of the chart, investors didn't like the last couple of quarters for the footwear maker of Uggs. That's one reason I'm staying on the sidelines for now.
In the last couple of months, Deckers Outdoors shares have been hit hard. During the fourth fiscal 2016 quarter, management guided down the first quarter of 2017 as well as the entire year.
In October, Deckers missed the second quarter. The company reported earnings of $1.21 per share, 2 cents better than expected. Revenue fell 0.2% to $485.9 million, which was below the analyst estimate of $495.7 million. Gross margin was 44.5%.
Then the company cut the third quarter and, for good measure, management chopped year-end guidance again. Talk about UGG!
So as it stands now, Deckers sees third-quarter fiscal 2017 earnings to $4.16 to $4.28 per share from $4.05 to $4.40. Analysts were at $4.59. Revenue is expected to be flat or down 2%, or $779.9 million to $795.9 million, versus the previous consensus estimate of $803.33 million.
For the full year, management forecasts revenue down 1.55 to 3%, or $1.82 billion to 1.84 billion. Gross margin is expected to be in the range between 47% to 47.5%.
Despite all the estimate cuts, for the year to date the stock is up about 22% for the year. The company has cleaned out its entire excess inventory (inventory is down 3% year over year) of old styles and has a series of new products that could restart growth.