Jefferies upbeat on Ugg maker Deckers Outdoor
NEW YORK (AP) — Deckers Outdoor, the maker of Ugg sheepskin boots, rose in morning trading Monday after an analyst proclaimed that the brand is still a winter favorite.
The boots are perennial holiday bestsellers. But last year several analysts questioned whether Ugg boots had lost some of their appeal after some weak sales and plans for price cuts. Warm weather in fall and winter can also sap the appeal of the $200-plus boots.
Shares have dropped 54 percent in the past 12 months, although they've recovered somewhat since late October.
Google searches for Ugg boots over the holiday season were quite similar to the prior year, which Jefferies' Randal Konik said was a positive signal, while the brand's online sales were healthy on the Friday and Monday after Thanksgiving, a big holiday shopping period.
"We believe it indicates that the brand is still very relevant (and NOT dead)," Konik wrote in a client note.
The analyst said that the weather has recently gotten colder in many parts of the U.S., which could lift Ugg sales.
Konik maintained a "Buy" rating and raised Deckers' price target by $10 to $60.
Shares of Deckers Outdoor Corp. gained $1.57, or 4 percent, to $41.50 Monday morning.