Critical Analysis: Deckers Outdoor Corporation (DECK) and Caleres (CAL)

Caleres (NYSE: CAL) and Deckers Outdoor Corporation (NYSE:DECK) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.

Risk and Volatility

Caleres has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500. Comparatively, Deckers Outdoor Corporation has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500.

Profitability

This table compares Caleres and Deckers Outdoor Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Caleres 2.39% 13.80% 6.15%
Deckers Outdoor Corporation 1.23% 14.25% 10.01%

Insider & Institutional Ownership

83.9% of Caleres shares are owned by institutional investors. 3.2% of Caleres shares are owned by insiders. Comparatively, 1.9% of Deckers Outdoor Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Caleres pays an annual dividend of $0.28 per share and has a dividend yield of 1.2%. Deckers Outdoor Corporation does not pay a dividend. Caleres pays out 19.2% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Caleres and Deckers Outdoor Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Caleres $2.63 billion 0.38 $185.72 million $1.46 16.10
Deckers Outdoor Corporation $1.83 billion 1.11 $226.21 million $0.67 94.87

Deckers Outdoor Corporation has higher revenue, but lower earnings than Caleres. Caleres is trading at a lower price-to-earnings ratio than Deckers Outdoor Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings for Caleres and Deckers Outdoor Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Caleres 0 2 4 0 2.67
Deckers Outdoor Corporation 0 10 5 0 2.33

Caleres currently has a consensus target price of $31.75, indicating a potential upside of 35.11%. Deckers Outdoor Corporation has a consensus target price of $66.31, indicating a potential upside of 4.32%. Given Caleres’ stronger consensus rating and higher probable upside, analysts clearly believe Caleres is more favorable than Deckers Outdoor Corporation.

Caleres Company Profile

Caleres, Inc. is a global footwear retailer and wholesaler. The Company is engaged in the operation of retail shoe stores and e-commerce Websites, as well as the design, sourcing and marketing of footwear for women and men. The Company operates through two segments: Famous Footwear and Brand Portfolio. The Company’s Famous Footwear segment includes its Famous Footwear stores and Famous.com. Its Famous Footwear stores offer a range of athletic, casual and dress shoes for the entire family. The Company’s Brand Portfolio segment offers retailers and consumers a portfolio of brands from its Healthy Living and Contemporary Fashion platforms by designing, sourcing and marketing branded footwear for women and men at a range of price points. Its Brand Portfolio segment sells footwear on a wholesale basis to retailers. The Brand Portfolio segment also sells footwear through its branded retail stores and e-commerce businesses.

Deckers Outdoor Corporation Company Profile

Deckers Outdoor Corporation is engaged in designing, marketing and distributing footwear, apparel and accessories for both everyday casual lifestyle use and high performance activities. The Company’s segments include operations of its brands, such as UGG, Teva, Sanuk and other brands; wholesale divisions, and Direct-to-Consumer (DTC) business, which includes E-Commerce business and retail store business. The Company sells accessories, such as handbags and loungewear, through domestic and international retailers, international distributors and directly to end user consumers both domestically and internationally, through its Websites, call centers and retail stores. The Company markets its products primarily under three brands: UGG, Teva and Sanuk. The Company’s other brands include Hoka One One (Hoka), Ahnu and Koolaburra by UGG (Koolaburra). It has a total of over 150 retail stores across the world.

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