Per a 13G filing this week, Janus Capital Management announced it was upping its stake of the shoemaker Deckers Outdoor Corp (NASDAQ:DECK). Janus now owns 3.6 million shares after increasing its position by 80%, and holds around 10% of Deckers’ common stock outstanding. Janus Capital Management is part of the publicly owned investment firm Janus Capital Group, and provides various investment strategies that utilize both equities and fixed income securities. Janus Capital has over $158 billion in assets under management cumulatively. Billionaire investor Ken Griffin – founder of Citadel Investment Group - is also a fan of Deckers, having increased his stake by 40% last quarter (check out Ken Griffin’s newest picks here).
Industry-wide U.S. footwear sales were up almost 5% in 2011 and should be positive over the next two years, on the back of growing discretionary spending. The transition of individuals to a more active and health conscious lifestyle will lead to increases in the performance and outdoor footwear segments. Also, assuming a return to a more normal winter, cold-weather footwear should see a boost on a year over year basis. Deckers is looking to execute in all of these high-growth industries.
Now, it's worth mentioning that warmer-than-usual temperatures have hurt sales of the company's UGG boots and Teva line, helping drive the stock down almost 50% year to date. These declines have also led to an inventory buildup that will likely force retailers to engage in price reductions this holiday season. A resurgence of value shoppers should help drive the purchasing demand for Deckers’ products, not to mention potential growth opportunities in Asia. Deckers expects to post a sales increase of 4.5% in 2012 and 8% in 2013.
Other top Deckers competitors include Crocs, Inc. (NASDAQ:CROX), Steven Madden, Ltd. (NASDAQ:SHOO), Wolverine World Wide, Inc. (NYSE:WWW) and Nike, Inc. (NYSE:NKE). Crocs produces unique resin-based shoe wear that offers superior comfort. Earnings for 3Q came in at $0.37 compared to $0.33 (yoy) and consensus of $0.43, and weakness in Asia is also hurting the company's top line. The plus for Crocs is its ability to generate solid cash flow, having grown its cash position by over 40% during the last twelve months to $312 million.
In 2012 thus far, Steven Madden has seen an up-and-down year with respect to its stock price. On the whole, the shoemaker is up 25% year to date, and the sell-side expects EPS to be up 12% in 2013. For the first half of 2012, Madden saw U.S. revenues up 47%, while its foreign segment was up 58% from the same period last year. Billionaire Steve Cohen – SAC Capital founder – upped his Steven Madden stake by almost 600% last quarter (see Steven Cohen’s other key moves).