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Deckers Outdoor Corp (DECK), NIKE, Inc. (NKE): Speciality Shoes Took a Decking

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The maker of the famous UGG boots, Deckers Outdoor Corp (NASDAQ:DECK) , nosedived 9% last week despite posting better-than-expected EPS. The big news was an $0.85 per-share loss, which happened to be $0.21 less than consensus.

But its UGG brand saw sales down 6.9% year-over-year. Deckers Outdoor Corp (NASDAQ:DECK) relies heavily on its UGG brand, which is not a hot topic given that it’s currently the middle of the summer. UGGs account for over 85% of sales. Yet, worth noting is that Deckers Outdoor Corp (NASDAQ:DECK) also owns the Sanuk and Teva sandals brands.

NIKE, Inc. (NYSE:NKE)

The turnaround story

Two unseasonably warm winters have put a real hurting on Deckers Outdoor Corp (NASDAQ:DECK)’ stock, with shares down nearly 45% over the past two years. Going forward, the company plans to make the move to a “classic” boot and shoe company, offering sneakers and ballet flats.

Its other initiative includes offering UGG Pure, which includes using wool material as opposed to sheepskin. This product should prove to be lower cost.

The company hopes to hit a sales target of $2.4 billion by 2015, including UGG sales of $1.8 billion, Teva sales of $250 million and sales from Sanuk brands of $200 million.

Deckers Outdoor Corp (NASDAQ:DECK) hopes to add 30 stores by 2013, two-thirds of which will be in Asia. Longer term, the shoe company plans to have a store base of 200 by the end of fiscal 2015.

Fellow specialty shoe company Crocs, Inc. (NASDAQ:CROX) also took a 20% plus nosedive last week. The company posted a 40%-plus fall in profits from $61 million in 2012 to $34.5 million in fiscal 2013. EPS came in at $0.48, well below consensus of $0.63.

The thing is, everyone wears shoes, it’s just a matter of the brand. Deckers Outdoor Corp (NASDAQ:DECK) and Crocs, Inc. (NASDAQ:CROX) are specialty shoes that just don’t appeal to everyone. However, there are a couple of other stocks that have a broader appeal.

A rising star

Skechers USA Inc (NYSE:SKX) has an impressively diverse product portfolio, ranging from fashion, athletic, non-athletic, and work footwear. Last week, Skechers USA Inc (NYSE:SKX) posted 2Q EPS of $0.14 compared to the $0.04 loss for the same quarter last year. As I noted in my thesis, the stock could easily reach its all-time highs of $40.

Sales are expected to be up over 15% in 2013 due to new product launches and new store openings — the company hopes to open upwards of 50 retail stores in 2013. The company also boasts a solid $265 million cash position compared to long-term debt of only $125 million.

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