The picture shows the latest issue of Barron's magazine cover
Trends changing thousands of shoes, the investors can accurately grasp the vast fortune, can not grasp the investors suffered a crushing defeat. Over the years the UGG sheepskin boots, has been one of the most popular footwear brand, its brand owner Deckers Outdoor company's stock has been highly sought after. In the past 10 years, Dexter's revenue grew 15-fold, reaching $ 1.56 billion. The past seven months, Reed Alex's stock dropped to $ 53, or more than 50 percent, compared with 10 years ago, or up 3300%.
Been singing empty UGG investors are now very proud of, but to talk about deep and retailers, fashion designers, analysts and consumers, we found that UGG is still great potential, but Dexter's sluggish stock price very attractive. With sheep prices fall, the company in international expansion and continue to open retail stores, Dexter's stock price next year at least up to $ 75.
However, these positive has only just begun to ferment. Robert - Luna said: "Now is a good time to Jiancang less need to consider risk management to Dexter's current share price level." Asset management company in Phoenix, Chairman and Chief Investment Officer of Capital Management SureVest ownership of shares of Deckers.
UGG sheepskin boots popular before, the the Deckers most famous is the Teva sandals. Teva launched in 1985, is the first professional sandals series. 10 years later, is the second year of the public offering of the Dexter company, the company spent $ 15 million to buy the UGG brand. In the 1960s, Australia's surfing athletes first started wearing UGG products. Since then, UGG sales of rapid growth on the basis of low, but it was not until Angel - Martinez became CEO after the formation of real climate. Martinez was Reebok's chief marketing officer, he set up the company's athletic footwear brand. Martinez, the use of high-end department store to expand the UGG sales, such as Nordisk Sturm the Manma Marcus department store, and the Bloomingdale Department Store. In order to improve the grade of the brand, UGG products are not mass chains and where the sale of such a medium-sized retailers like Macy's.
Although the world economic recession, but Dexter's income in the past five years or a 35% average annual growth rate of earnings per share grew even faster, up to 44%. The company's total revenue last year was $ 1.38 billion, profits $ 199 million and earnings per share of $ 5.07.
In this context, this year in terms of Dexter is indeed a disaster: the sudden warm winter, sheep prices rose 40 percent as well as the economic crisis in Europe, UGG has been hoping to expand sales there. UGG accounted for 87% of Deckers's sales revenue last year, this product has a very large problem on Dexter.
Another Deckers two consecutive quarter of lower profit expectations in March, the degree of profit fell exceeded analysts' estimates. In April, the company's management to full-year profits are expected to fall 9% -10%, many short-term investors dumped shares of Deckers.
The analyst believes that Dexter's income only in this year increased by 13 percent, and profits will decline nearly 11 percent to $ 178 million and earnings per share will be $ 4.56.
Dexter is not a company in crisis. Deckers $ 229 million of liquidity, which is equivalent to $ 6 per share, this year the company also generated $ 100,000,000 in net cash flow. The management decided to use stock buybacks to deal with the decline in stock prices, and the first quarter to buy $ 20 million in stock, they also authorized to continue to purchase shares of $ 80 million. CFO Thomas - George told Barron's: "We will continue to buy back shares, so that can help us to set a lower limit for the assessment of earnings per share."
At the same time, since April in sheep's clothing prices have dropped 35 percent, mainly due to the Australian sheep breeding increase in the number and the rise in meat consumption. If this trend continues, Dexter will be a great good.
UGG flagship sheepskin boots are usually per pair price of $ 200, they usually only wear one or two winter, after the company's loyal users will continue to buy UGG.
Company Nordisk Sturm said: "UGG is a very valuable partner, their products have been favored by customers." Some small retailers also sell UGG Justin - Siegel said, the Little, president of Pittsburgh : "After the weather gets cold, the first thing people think of is to buy a new pair of UGG, UGG sales are very confident."
Deckers opened a total of 46 UGG store, including the flagship store in Madison Avenue, New York. This year's first quarter performance is disappointing, these stores sales growth is single digit, UGG series of product sales increased by only 6.5%. But the management told Barron's, the company's spring and summer series of products, such as sandals, sports shoes and canvas shoes, performance is excellent. CEO Martinez said: "The long-term investors aware of the strength of the brand."
Dexter's profit fell 59 percent in the first quarter due to the decline in operating margin and demand in Europe. The first quarter of the amount of international sales increase 34 percent, reaching $ 76 million, accounting for 31% of the total income, but far lower than expected. This trend many analysts uneasy at Canaccord Genuity's Camilo - Lyon pointed out that Dexter profit growth in the future the key in the international market. April in a report in Deckers stock level buy reduced to possession, Lyon said: "Europe's economic situation has affected the demand for the product, and Dexter's mostly new stores are planned for where to open. "
More than half of the UGG store opened outside the United States, the company plans to newly opened 24 stores, mostly in Asia and Europe. Dexter's share price fell below $ 60, SureVest Capital, Luna began to buy, he believes the UGG still very strong next year income stabilized and begun to grow, the share price will rise more than 40%. "
The past six years, UGG not only the production of the minimalist style of footwear products to begin production keeping up with fashion accessories and coats. Last fall, the company even launched a series of dedicated men's boots, sandals, oxford shoes and sports shoes. Martinez is very clearly the value of sports stars in the Reebok experience, Dexter invited to the New England Patriots (microblogging) team quarterback - Tom Brady to do Brand Ambassador.
Dexter did not disclose the UGG brand sales, but analysts estimated that the traditional boots, accounting for about 50 percent of UGG's sales revenue last year. Martinez and his team also continue to add fresh elements to the Teva family of products, Teva last year accounted for 9% of the total sales revenue of Deckers.
The most anticipated Dexter last year spent $ 120 million to buy Sanuk brand. The brand this year is expected to bring $ 90 million of revenue, accounting for 6 percent of the company's sales revenue. Sales channels as the company expanded to department stores and outdoor and sporting goods stores, management expects sales revenue will increase to $ 200 000 000 2015.
Deckers, there are three other small leisure brand, the future will benefit from the company's marketing and brand strategy, and now their share of sales revenue does not exceed 2%.
Footwear on the market, Dexter's competitors are mainly three: wolverine Group with Mele and Patagonia brand, Columbia Sportswear Company production Sorel series of footwear products, as well as smaller Crocs.
Higher compared with the other three, Dexter's profit growth, return on equity rate is also higher, reaching 25 percent, while its price-earnings ratio of only 11.6, 比沃尔弗林, and Colombia are low, they are 15 and 15.6.
15 of the year is expected to Dexter's stock price to 68. Next year's earnings per share to be able to rebound to about 5.48, the stock price will exceed $ 80.
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