Why Deckers' Shares Plunged

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Uggs boot maker Deckers Outdoor (NAS: DECK) were looking unfashionable to investors today, as shares fell as much as 10% in intraday trading.

So what: Sam Poser, a stock analyst at Sterne Agee, has been a scourge for Deckers investors this week, and he was back again today, reiterating his dour view of the company. The central issue for Deckers in Poser's view can be boiled down to one word: sales. No, that's not sales as in how much the company is selling, but sales as in discounting the price of its furry boots. The company has marked down its core styles between 5% and 8%. While that may not sound like much, for investors that's a nice chunk of lost profitability. It's also rarely a good sign when a premium brand thinks it has to cut prices.


Now what: In addition to Uggs, Deckers also owns the Simple, Teva, and Tsubo brands, but none of those has driven the business the way Uggs have in recent years. Perhaps this is just a bump in the road for Uggs and Deckers. However, the fashion world can be pretty unforgiving when it moves on from a certain look, and it's also very possible that this is a sign that the Ugg era is winding down.

Want to keep up to date on Deckers Outdoor?Add it to your Watchlist.

The article Why Deckers' Shares Plunged originally appeared on Fool.com.

Motley Fool newsletter services have recommended buying shares of Deckers Outdoor. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributorMatt Koppenhefferhas no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter,@KoppTheFool, or onFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.

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