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Investing.com - Raymond (NSE:RYMD) James raised its price target on Deckers Outdoor (NYSE:DECK) to $137.00 from $123.00 while maintaining a Strong Buy rating following the company’s first-quarter fiscal 2026 results. InvestingPro analysis shows the company maintains excellent financial health with a perfect Piotroski Score of 9, and current trading levels suggest the stock is undervalued relative to its Fair Value.
The footwear company reported better-than-expected performance across earnings per share, revenue, gross margin, and EBIT margin. With a market capitalization of $15.68 billion and impressive revenue growth of 16.28% over the last twelve months, both HOKA and UGG brands exceeded revenue expectations, though HOKA’s U.S. direct-to-consumer business faced challenges and declined year-over-year.
Raymond James noted that HOKA’s wholesale order book remains robust with strong sell-through at full price, indicating brand strength despite weaker U.S. direct-to-consumer performance. The firm expects U.S. direct-to-consumer sales to improve as comparisons ease and execution enhances.
The analyst projects HOKA brand growth of 14% in fiscal year 2026, aligning with Deckers’ initial guidance framework. UGG also performed better than expected in the first quarter and remains on track to grow at least mid-single-digits in fiscal year 2026.
While tariffs will now create $185 million of unmitigated cost pressure (a 370 basis point gross margin headwind) versus $150 million previously due to higher Vietnam tariffs of 20%, Raymond James believes Deckers has levers to mitigate more than it currently indicates. The company’s strong financial position is evidenced by a healthy current ratio of 3.72. For deeper insights into DECK’s financial health and growth potential, including 10 additional ProTips and comprehensive valuation metrics, visit InvestingPro.
In other recent news, Deckers Brands reported impressive financial results for the first quarter of fiscal year 2026. The company achieved earnings per share of $0.93, significantly beating the forecasted $0.68. Revenue also exceeded expectations, reaching $965 million compared to the anticipated $900.31 million. In governance updates, Deckers Brands has nominated Patrick J. Grismer for election to its Board of Directors, succeeding Dave Powers, who will retire after more than nine years of service. Grismer brings extensive financial leadership experience, having held CFO roles at prominent companies such as Starbucks (NASDAQ:SBUX) and Hyatt Hotels (NYSE:H). Additionally, he serves on the board of Krispy Kreme (NASDAQ:DNUT) and has chaired the board of Panera Brands. These developments reflect Deckers Brands’ commitment to strong financial performance and strategic leadership.
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