Decker (DECK) has been one of the biggest success stories in the consumer space this decade. Since the depths of the financial crisis the stock has more than quintupled from sub-$20 to $100. The brand expansion and sustainability of growth have been questioned all through the bull market in the stock. Ugg has been the key brand driving growth. The products have always been very high quality and comfortable but the fashionista set has continually cringed thinking that styles would morph and Ugg would hit a wall in terms of growth. In short, the company continues to thrive. In the consumer space, success often begets additional success.
In a savvy move, Deckers launched an advertising campaign with Tom Brady as they attempt to expand market share in the men’s category. Brady is a larger than life figure these days around the NFL, New York, Boston, and even the world. He is a likable guy in the prime of his football career after early success and part of one of the world’s mega-couples, married to Brazilian supermodel Gisele Bundchen. This advertising is creative and represents a new level for Deckers which seeks to foster continued growth in the brand around the world. Brady looks a little dorky at times but he just seems to pull this off. The whole commercial gets some street cred from music by Mos Def.
Deckers is almost a $4B company and the stock is trading at 20x this year and 17x next year’s EPS. While this is a lofty multiple which prices in continued growth, Deckers may continue to surprise to the upside as they get better with marketing. The stock may be a tough one to bet against and many investors have as the short interest is 12% of the float.