The Zacks Analyst Blog Highlights:United Continental Holdings, Deckers Outdoor, Skechers, Iconix Brand Group and Brown Shoe
CHICAGO, Oct. 2, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the United Continental Holdings, Inc. (NYSE:UAL-Free Report), Deckers Outdoor Corp. (NYSE:DECK-Free Report), Skechers USA Inc. (NYSE:SKX-Free Report), Iconix Brand Group, Inc. (Nasdaq:ICON-Free Report) and Brown Shoe Co. Inc. (NYSE:BWS-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Wednesday's Analyst Blog:
Is United Continental Worthy of a Spot in Your Portfolio?
On Sep 25, we issued an updated research report on United Continental Holdings, Inc. (NYSE:UAL-Free Report).
United Continental recorded an impressive performance in the second quarter of 2014. The company posted earnings of $2.34 per share, much ahead of the Zacks Consensus Estimate of $2.22. The results also improved substantially from earnings of $1.57 per share reported in the comparable prior-year period. Quarterly total revenue improved 3.3% year over year to $10.33 billion, but missed the Zacks Consensus Estimate of $10.39 billion.
United Continental expects to implement appropriate network and fleet management strategies to accelerate its revenues. Going ahead, United Continental is focusing on augmentation of ancillary revenues by $700 million to $3.5 billion by 2017. The carrier hopes to achieve this by offering new products to customers and increasing fees on the current ones. In this regard, it continues to study a passenger's destinations, travel pattern and prior purchases to provide appropriate ancillary products. Further, United Continental is gaining healthy response from its PerksPlus product – a loyalty program for small-to-medium-based businesses.
Moreover, United Continental is redesigning its fleet structure for greater efficiency in operations. We appreciate the company's efforts to redesign its flight structure at the Chicago, Denver and Houston hubs by the spring of 2015, which is expected to increase its efficiency and shorten connection times. The company is also cutting down on its domestic fleet count, retiring older and less efficient aircraft and reconfiguring domestic aircraft for international service. Notably, the company bought seven Embraer 175 aircraft during the second quarter.
The carrier is also exhibiting excellent cost control strategies. Notably, United Continental has already started working on its restructuring efforts and plans to reduce annual costs by $2 billion by cutting down on fuel and non-fuel expenses. The company also plans to enhance productivity by slashing sourcing cost, improving maintenance procedures and optimizing distribution channels. Further, the carrier aims at strict capacity deployment to maintain a profitable balance between demand and supply.
On the flip side, fuel price volatility continues to be one of the significant challenges. The company's ability to pass along the increased cost of fuel to its customers is limited by the competitive nature of the airline industry. Although crude oil is currently trading on the lower side, even a small change in fuel prices can significantly affect the carrier's profitability.
Will Strong Momentum Continue for Deckers?
Deckers Outdoor Corp. (NYSE:DECK-Free Report) continues to impress investors with its product innovation, cost containment, store augmentation and strong focus on profitable markets. The company is optimistic about its future performance, given its continuous investments in brand development, omni-channel capacities, optimum capital allocation and strong fall collection.
The stock has been gaining momentum ever since it posted narrower-than-expected loss for first-quarter fiscal 2015. The company incurred loss of $1.07 per share that fared better than the Zacks Consensus Estimate of loss of $1.31, thanks to strong demand for UGG, Teva, Sanuk and HOKA brands.
However, what came as a drawback was that the loss per share for the quarter under review increased from a loss of 85 cents reported in the year-ago quarter due to higher selling, general and administrative expenses.
On the contrary, net sales rose 24.3% year over year to $211.5 million, coming ahead of the Zacks Consensus Estimate of $191 million.
Top-line growth was fuelled by robust demand for its brands, stellar eCommerce growth and the company's omni-channel capability. Going forward, Deckers plans to open smaller concept omni-channel outlets and expand a new tool "Retail Inventory Online" to help customers locate products before visiting the outlets.
Following the impressive quarter, management raised its sales and earnings guidance for the year. Deckers now projects total revenue growth of 14% for fiscal 2015, up from 13% forecasted earlier. Also, management now envisions a 14.5% rise in earnings per share for the fiscal year, up from the 13.5% jump envisioned earlier.
However, stiff competition from other footwear companies including Skechers USA Inc. (NYSE:SKX-Free Report), Iconix Brand Group, Inc. (Nasdaq:ICON-Free Report) and Brown Shoe Co. Inc. (NYSE:BWS-Free Report) may act as a hurdle. With significant financial, technological, marketing and manufacturing advantages, these competitors may impact the company's sales and margins.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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