Deckers Is A Strong Buy After Outstanding Q2 Earnings
- A cost scare due to sheepskin prices in 2012 has left Deckers under-loved and undervalued.
- Deckers comes out ahead in comparisons with competitors by EV/EBIT, EV/EBITDA, and revenue growth metrics.
- Falling sheepskin prices, inversely correlated to rising lamb prices, should continue to be accretive to earnings and provide a natural hedge for Euro/Pound sales exposure.
- 19% short interest in a highly profitable business growing at a 24% clip is an extra bonus that should further bolster demand for shares in the coming months.
- Q2 results reflect the leverage of the brand portfolio to the current retail and economic environment.