Deckers Outdoor Corp. (NYSE:DECK)

The analysis of the available financial ratios over the six-year period reveals several noteworthy trends in the company's asset and equity utilization efficiency.

Net Fixed Asset Turnover

This ratio exhibited a generally rising trend from 8.65 in 2018 to a peak of 14.16 in 2022, before a slight decline to 13.6 in 2023. This indicates an overall improvement in the efficiency with which the company utilized its net fixed assets to generate sales, achieving greater sales per unit of net fixed assets over the years.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

When including the right-of-use asset from operating leases, this turnover ratio shows a distinctly different pattern. It remained consistent with the net fixed asset turnover at 8.65 and 9.45 in 2018 and 2019 respectively, but then declined sharply to 4.71 in 2020. Subsequently, it rose gradually to 7.78 in 2022 before a small decrease to 7.56 in 2023. The sharp decrease in 2020 likely reflects the initial recognition of operating lease assets under updated accounting standards, which temporarily increased the asset base and lowered turnover. The gradual recovery suggests improving efficiency in utilizing these lease assets, but the ratio remains below the traditional fixed asset turnover, highlighting a larger asset base when including leases.

Total Asset Turnover

The total asset turnover ratio decreased from 1.51 in 2018 to a low of 1.17 in 2021, indicating a decline in the efficiency of using total assets to generate revenue during that period. However, the ratio rebounded to 1.35 in 2022 and further increased to 1.42 in 2023, suggesting a recovery in asset utilization efficiency in recent years.

Equity Turnover

The equity turnover ratio followed a downward trend from 2.02 in 2018 to 1.76 in 2021, indicating lower revenue generation relative to shareholders' equity. From 2021 to 2022, the ratio increased significantly to 2.05 and remained stable in 2023. This turnover trend aligns with the total asset turnover, indicating that the company improved its efficiency in generating sales from equity after 2021.

Overall, the data indicates a period of declining asset and equity turnover efficiency from 2018 to around 2020-2021, followed by a recovery phase through 2022 and 2023. The impact of the inclusion of operating lease assets is evident, causing a distinct pattern in the fixed asset turnover metric with a sharp drop coinciding with their recognition and subsequent improvement. The recent increases in total asset and equity turnover ratios suggest the company is regaining or improving the effectiveness of its asset and equity base in driving sales growth.

Net Sales

Net sales demonstrate a consistent upward trajectory over the six-year period, expanding from approximately $1.9 billion in 2018 to nearly $3.63 billion in 2023. This indicates a robust growth trend with increasing revenue generation each year. The most significant year-over-year increases appear between 2021 and 2023, reflecting accelerated expansion in sales volume or pricing power during this timeframe.

Property and Equipment, Net of Accumulated Depreciation

The net value of property and equipment shows a slight decline initially, decreasing from about $220 million in 2018 to roughly $206 million in 2021. However, from 2021 onwards, there is a noticeable recovery and growth, reaching approximately $267 million by 2023. This suggests capital investments or asset acquisitions increased after 2021, possibly to support operational expansion or modernization efforts.

Net Fixed Asset Turnover

The net fixed asset turnover ratio has exhibited steady improvement across the period, rising from 8.65 in 2018 to a peak of 14.16 in 2022, followed by a slight decrease to 13.6 in 2023. This upward trend reflects improved efficiency in generating sales relative to fixed asset investment, implying that the company's utilization of its property and equipment became more effective over time. The minor reduction in 2023 could indicate a moderation in asset utilization efficiency or increased fixed asset base growth outpacing sales expansion.

Net Sales

Net sales have demonstrated a consistent upward trend over the six-year period. Starting at $1,903,339 thousand in 2018, sales increased each subsequent year, reaching $3,627,286 thousand by 2023. The growth accelerated notably between 2020 and 2022, with a particularly strong jump from $2,545,641 thousand in 2021 to $3,150,339 thousand in 2022. This suggests a robust expansion in the company's revenue-generating activities over time.

Property and Equipment, Net

The net value of property and equipment, including operating lease right-of-use assets, displayed fluctuations during the period. Initially, the figure decreased slightly from $220,162 thousand in 2018 to $213,796 thousand in 2019. A substantial increase was observed in 2020, rising to $452,559 thousand. Following this peak, the value declined in 2021 to $393,201 thousand, then exhibited modest growth in the subsequent years, reaching $479,981 thousand by 2023. These movements likely reflect significant capital investments or reclassifications during 2020, with stabilization and moderate expansion in assets thereafter.

Net Fixed Asset Turnover

The net fixed asset turnover ratio experienced a downward trend initially, dropping from 8.65 in 2018 to its lowest point of 4.71 in 2020. This decline corresponds with the sharp increase in net property and equipment during the same period, indicating that asset additions outpaced sales growth temporarily, reducing asset efficiency. However, from 2020 onward, turnover improved, rising to 6.47 in 2021 and further to around 7.78 in 2022, before a slight decrease to 7.56 in 2023. This partial recovery suggests improved utilization of fixed assets relative to sales following the asset base expansion.

The financial data reveals several key trends over the six-year period ending March 31, 2023. The company experienced consistent growth in net sales, with the amount increasing from approximately 1,903 million US dollars in 2018 to about 3,627 million US dollars in 2023. This growth suggests an expanding revenue base and potentially enhanced market penetration or product demand during this timeframe.

Total assets also exhibited a steady upward trend, rising from around 1,264 million US dollars in 2018 to roughly 2,556 million US dollars in 2023. This increase in total assets may indicate investments in property, equipment, or other resources necessary to support the expanding sales operations.

Net Sales

Demonstrated a continuous increase each year, with particularly strong growth between 2021 and 2023, where sales accelerated from approximately 2,546 million to about 3,628 million US dollars. This reflects a compound growth pattern indicating robust business expansion.

Total Assets

Increased steadily over the period, albeit at a slightly decreasing rate in the latter years. The rate of asset growth seems to have supported the expansion in sales, signifying possible capital investments aligning with revenue growth.

Total Asset Turnover Ratio

The ratio, which measures the efficiency of asset use to generate sales, showed a declining trend from 1.51 in 2018 to a low of 1.17 in 2021. This suggests a period where asset growth outpaced sales growth, resulting in lower efficiency. However, from 2021 onward, the ratio improved to 1.35 in 2022 and 1.42 in 2023, indicating enhanced asset utilization and a better alignment between asset size and sales generation in recent years.

Overall, the data suggests that the company successfully expanded its revenue and asset base over the six-year span, with initial reduction in asset turnover efficiency followed by recovery in the last two years. The improvement in asset turnover in the final years reflects enhanced operational efficiency or better asset management relative to sales production.

Net Sales

Net sales demonstrate a consistent upward trajectory throughout the examined period. Starting from approximately $1.9 billion in 2018, net sales increased steadily each year, reaching about $3.63 billion by 2023. This growth indicates robust expansion in revenue generation over the six-year span.

Stockholders’ Equity

Stockholders' equity also shows a clear increasing trend, growing from around $941 million in 2018 to nearly $1.77 billion in 2023. The rise is relatively steady, with a noticeable acceleration after 2020, suggesting enhanced capital accumulation or retained earnings contributing to stronger equity positions.

Equity Turnover

The equity turnover ratio displays some variability over the period. It initially declines from 2.02 in 2018 to a low of 1.76 in 2021, indicating a period where net sales increased at a slower rate relative to equity growth. However, from 2021 onwards, it improves to 2.05 by 2022 and remains stable into 2023, suggesting a recovery in efficient use of equity to generate sales.

Overall Trends and Insights

Overall, the data reflects a company experiencing strong and consistent sales growth alongside a healthy increase in equity. The initial dip in equity turnover ratio may imply a period of investment or equity build-up outpacing sales expansion. The rebound in this ratio in the final years indicates an improved balance, with the company leveraging its equity more effectively to drive revenue growth.