Deckers Outdoor Corp. (DECK-N)

Leading footwear and apparel, founded 1973. Explosive growth in running shoes segment. Highly profitable lifestyle brand UGG boots. Very disciplined inventory management. 

Direct-to-consumer channel very strong and driving margin expansion. Global demand for premium footwear is rising, this name can capture that market share. Robust balance sheet, good management execution. Sees ~15% earnings growth. 

Short-term comments and guidance caused stock to drop to the 200-day MA, but he's not worried longer term. Good chance to buy a quality name. No dividend.

They just reported Q3: the largest and most profitable in history, beating sales, all-time high gross margins of 60%, and a strong EPS beat. Their brands did well, like Hoka up 23.7%. But then management gave a disappointing forecast for this quarter only 1% revenue growth (11% previously) with Ugg sales to decline and earnings -55% YOY. The strong momentum they had will end, disappointing the street. The stock was priced for perfection. Problem was that Ugg sold so well over holidays that this brand is now sold out. Also, Hoka's growth is slowing; Hoka is a big reason why people own these shares, but such growth expectations are too high. Sales of Hoka should normalize after they restock. Plus, the company has several big launches coming, and have $2.2 billion in cash and zero debt.

He bought this May 1, and up 52%. It's still cheap. Trends look favourable over the holiday season. Hold until at least May 2025.

Because of today's strong jobs report, people will buy DECK's products into the holiday season.

In consumer discretionary companies, the state of the consumer isn't necessarily the most important factor. Remember what DECK bought a company 10 years ago for $1 million and this company did $1.8 billion in sales over the least 4 quarters.

These outdoors stocks are fashion, and DECK has a shelf life of another year.

He added more shares. Loyal customers and the #3 in sneakers. They have momentum top and bottom lines. Return on capital is 2-3x their peers.

Jumped 34% in May, a big S&P winner. One of the few growers in the running shoe business. They reported a big earnings beat.

One of the best performers in retail, boasts terrific brands while customers are loyal and he expects will remain so.

Footwear is always dicey and this stock has moved up so much that you don't buy it.  He likes it and its brands.