Can Deckers & Wolverine Soar Even Higher Post a 52-Week High?
The Shoes and Retail Apparel industry displayed a bull run last year. While the industry advanced 21.3%, the S&P 500 gained 19% over the said time frame. Two players in this industry — Deckers Outdoor Corporation DECK and Wolverine World Wide, Inc. WWW — have outpaced this trend as well, with a respective rally of 39.5% and 45.5% in a year’s time. Apart from benefiting from their strategic endeavors, we expect these stocks are poised to gain from a buoyant U.S. economy.
Consequently, shares of Deckers and Wolverine have hit a 52-week high on Dec 29. Both the companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Let’s take a look at the two companies’ growth strategies that are aiding them to outperform the industry.
What’s Pushing Deckers’ Shares Higher?
Shares of Deckers have hit a 52-week high of $80.96 on Friday, closing marginally lower at $80.25. The company looks appeasing driven by its robust omni-channel endeavors, solid restructuring plan and other growth strategies. In fact, a Momentum Score of A and a long-term earnings growth rate of 10.7% further raise optimism in the stock.
Keeping pace with the changing trends, Deckers has been constantly developing its e-commerce portal to capture incremental sales. Moreover, it is focused on opening smaller concept omni-channel outlets and expanding programs, besides making new additions to its portfolio.
In an effort to drive long-term growth, management has also undertaken strategic initiatives. We believe the company’s focus on expanding its brand assortments, bringing more innovative line of products, targeting consumers digitally and optimizing omni-channel distribution are encouraging.
Additionally, analysts are steadily growing bullish on the stock as evident from the uptrend in the earnings estimates. The Zacks Consensus Estimate of $4.34 for fiscal 2018 and $5.01 for fiscal 2019 has moved up 4 cents and 5 cents, respectively, over the past seven days. Also, the estimate for the third-quarter fiscal 2018 has climbed 3 cents to $3.82 in the same time frame.
Driven by its robust growth strategies and better-than-anticipated second-quarter results, management raised its fiscal 2018 guidance. Earnings are envisioned between $4.15 and $4.30 per share, up from $3.95-$4.15 projected earlier.
What’s Driving Wolverine’s Shares?
Although shares of Wolverine have hit a 52-week high of $32.05 on Dec 29, it closed a tad lower at $31.88. In fact, the company has been putting up a stellar show buoyed by its solid strategic transformation plan — the WOLVERINE WAY FORWARD — as well as other robust growth endeavors and an impressive earnings history.
The company’s WOLVERINE WAY FORWARD initiative focuses on strengthening product innovations, developing more consumer-centric approach, enhancing geographical foothold as well as delivering persistent organic growth amid a fast-changing global retail and consumer environment. Also, management intends to develop digital infrastructure and has been taking other initiatives to boost e-commerce growth.
Driven by its strategic endeavors, Wolverine boasts a robust surprise history. In third-quarter 2017, the company delivered eighth straight quarter of positive earnings surprise with four consecutive sales beat. Also, it has recorded an average beat of 21.8% in the trailing four quarters. The company’s long-term earnings growth rate of 12.5% further bolsters investors’ confidence.
Other Stocks That Scaled 52-Week High
Constellation Brands with a long-term earnings growth rate of 18.4% has delivered an average positive earnings surprise of 13.6% in the trailing four quarters.
Burlington Stores with a long-term earnings growth rate of 17.5% has pulled off an average positive earnings surprise of 15.2% in the last four quarters.
Zacks Editor-in-Chief Goes “All In” on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
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Constellation Brands Inc (STZ): Free Stock Analysis Report
Burlington Stores, Inc. (BURL): Free Stock Analysis Report
Deckers Outdoor Corporation (DECK): Free Stock Analysis Report
Wolverine World Wide, Inc. (WWW): Free Stock Analysis Report
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