Financial Analysis of Deckers Outdoor Corporation
Abstract
We have conducted the financial analysis of one of the leading US brand Deckers Outdoor Corporation for the year 2011. We have divided the research in twoparts. In part one, we have analysed the financials of Deckers Outdoor Corporation by using various financial tools such as Horizontal and vertical analysis of Balance sheet and income statement, and financial ratios in order to auge its performance in terms of profitablity, debt management, asset management and liquidity management. In second part, we have discussed the footwear industry of US and its market components. In addition, we have also observed some macro economic factors that would impact the operations of footwear industry such as Inflation rate, prices of footwear and related goods, exchange rate, and real income of consumers. We can conclude that industry would grow at a moderate speed in USA for the next 5 years and Deckers Outdoor Corporaton requires to strengthen its liquidity and asset management for the year 2012. As it lacks liquidity and efficiencyin manging assets due to accquisition of Sanuk brand, opening a numbers of retail stores worldwide, and heavy investments in inventories. Overall its performance was good and it is expected to grow in future atan adequate rate.
Table of Contents
Introduction2
History2
Products and Competitors3
Financial Analysis3
Horizontal Analysis3
Vertical Analysis5
Ratio Analysis6
Industry Overview11
Macroeconomic Factors12
Conclusion14
References15
Appendices17
Deckers Outdoor Corporation
Introduction
Deckers Outdoor Corporation runs a designer footwear and accessories business and it is also operating as a manufacturer, seller and brand supervisor of its products and services. Deckers Outdoor specializes in men, women and children footwear, handbags and clothing. Deckers Outdoor trades its products locally and internationally. The company\s main headquarter is located in California, it has employed 19000 people. Deckers Outdoor earned $1,377.3 million in 2011 i.e. 37.6% higher than 2010, total operating profit stood at $284.8 million i.e. 14.4% higher than 2010, and net profit rose by 25.8% from 2010 i.e. $199.1 million
History
Doug Otto led the Decker Outdoor Corporation in 1973. It started from producing sandals locally. The company started producing and distributing Teva Sandals in 1985. It bought Simple Shoes in 1993 and initiated its initial public offering in the same year at NASDAQ. It further got hold onto other assets of Teva sandals and Ugg Holdings in 1995. TSUBO LLC in 2008 and signed a joint venture with Shella International Ltd in the same year. In addition, it also bought Sanuk brand in July 2011. Stephen Murray was appointed as the President for Europe, Africa and Middle East operations in 2011, James E Quinn and Lauri M Shanahan were appointes as the Directors in 2011
Products and Competitors
Major products offered by Deckers Outdoor are Footwear, Sport sandals, Sandals and Bags. Brands own by it are Teva, UGG, Sanuk, TSUBO, Ahnu and MOZO (Regional Business News, 2012). Its key competitors include Adidas AG, Columbia Sportswear Company, NIKE Inc, The Timberland Company, and Tiffany & Co (Market Line, 2012).
Financial Analysis of the Company
Financial Analysis help in gauging the company's financial performance over the particular time period, it also measures the ...