Deckers Outdoor Corp. (NYSE:DECK)

The financial ratios and cycle periods indicate fluctuating operational efficiency over the reviewed quarters. Several key observations emerge from the data:

Inventory Turnover

This ratio shows a cyclical pattern with peaks occurring notably around the end of calendar years (December quarters). It reached lows near 1.8 to 2.0 several times, while the highest values exceeded 4.0, particularly in the first quarter of 2021. The fluctuations suggest varied inventory management effectiveness and possibly seasonality impacts on inventory levels or sales.

Receivables Turnover

The receivables turnover ratio displays substantial variability but generally remains between approximately 6 to 15. Higher turnover values around mid-year and early quarters indicate periods of improved collection efficiency. The lowest values typically occur in the fourth quarter, potentially reflecting easing credit terms or slower collections during this period.

Payables Turnover

Payables turnover displays significant volatility, with values as low as about 2.7 and as high as roughly 10.3. The highest turnover ratio was seen in mid-2017, suggesting rapid payment to suppliers, whereas the consistently lower values in later periods imply extended payment terms or delayed payables, likely contributing to cash management strategies.

Working Capital Turnover

The working capital turnover ratio fluctuates modestly between approximately 1.8 and 3.1. Notable dips below 2.0 arise around 2020 and early 2021, indicating less efficient usage of working capital during those periods. This trend may correlate with external disruptions affecting operations and liquidity.

Average Inventory Processing Period

The days inventory is held show considerable variation, ranging from about 87 days (lowest in early 2021) to over 200 days (late 2017 and 2018). These trends correspond inversely to inventory turnover, reinforcing cycles of slower and faster inventory movement, and possibly reflecting demand fluctuations or supply chain adjustments.

Average Receivable Collection Period

The collection period ranges from about 23 days to 60 days, with shorter periods indicative of quicker cash inflows. Longer periods appear sporadically in fourth quarters and around 2018, hinting at timing differences in credit policies or customer payment behaviors.

Operating Cycle

This metric, which sums inventory processing and receivable collection periods, varies broadly from around 118 days up to over 260 days. The peak values correspond to periods when both inventory and receivables periods are extended, signaling slower overall operational cash flow conversion.

Average Payables Payment Period

This period exhibits significant variability, extending from roughly 35 days to over 130 days. Longer payment periods observed in multiple quarters from late 2017 through 2021 suggest the company utilized supplier credit extensively, possibly as a liquidity management tool.

Cash Conversion Cycle

The cash conversion cycle fluctuates between a low of approximately 35 days in late 2023 and highs around 140 days. Periods of shorter cycles indicate more rapid conversion of investments in inventory and receivables into cash, improving liquidity, whereas longer cycles indicate slower cash recovery.

Overall, the data reflect a business subject to significant seasonality and possibly external market influences impacting turnover and cash flow efficiency. The recurrent increase in inventory holding periods and operating cycles towards year-end quarters suggest inventory buildup in anticipation of higher sales or demand cycles. Fluctuations in payables periods imply strategic supplier payment management, possibly to optimize cash flow. Recent quarters, particularly post-2022, exhibit improvement in the cash conversion cycle, pointing to enhanced operational liquidity management.

The financial data reveals several notable trends and fluctuations in the cost of sales, inventories, and inventory turnover ratios over the analyzed periods.

Cost of Sales

The cost of sales exhibits a generally increasing trend with some seasonal or periodic fluctuations. Initial figures start around 119 million USD and rise substantially over the examined quarters, peaking multiple times near or above the 600 million USD level towards the end of the period. This upward trajectory indicates growing operational scale or increased cost inputs over time. Intermittent drops, particularly in certain quarters, suggest seasonal variations or inventory adjustments impacting the cost structure.

Inventories

Inventory levels demonstrate significant variability across periods. Beginning with approximately 442 million USD, inventories fluctuate widely, with several peaks and troughs. Notable spikes in inventory are visible around mid-2019 and 2022–2023, reaching highs above 900 million USD, suggesting accumulation of stock or strategic buildup ahead of increased demand or production. Conversely, some quarters show substantial reductions, indicating active inventory management or sales acceleration. The inventory trend overall appears cyclic with large swings rather than steady growth or decline.

Inventory Turnover

Inventory turnover ratios, where available, vary broadly from roughly 1.8 to 4.2 times per period. Higher turnover ratios generally correlate with quarters of lower inventory levels or higher sales efficiency, indicating better inventory management and faster conversion of stock into sales. Periods with turnover above 3.0 suggest effective inventory utilization, while ratios below 2.0 may indicate slower movement of goods or accumulation of stock. The fluctuations in turnover align with the observed changes in inventories and cost of sales, reinforcing the cyclical nature of inventory management within the company.

Overall, the data suggests a business experiencing growth in scale with corresponding increases in cost of sales alongside dynamic inventory management. The cyclical patterns in inventory and turnover ratios point toward strategic stock adjustments possibly driven by seasonality or market demand variations. Continuous monitoring of these metrics would be key for optimizing operational efficiency and cost control in future periods.

The data demonstrates notable fluctuations in net sales across the reported quarters, with a general pattern of substantial increases in certain periods followed by declines in others. For instance, net sales exhibit strong spikes in quarters such as December 2017, December 2018, December 2020, and December 2021, indicating potential seasonal peaks near year-end. Significant declines typically appear in the first quarters following these peaks, suggesting cyclicality in revenue generation.

Trade accounts receivable, net of allowances, also show considerable variability with peaks coinciding approximately with quarters of high sales. However, the relationship is not perfectly synchronous, reflecting potential variations in credit policies, customer payment behaviors, or collection effectiveness. For example, the unusually high receivables in September 2017 correspond with relatively high sales in preceding quarters but show divergences in other periods such as December 2018 and March 2019.

The receivables turnover ratio, available intermittently, further illustrates changes in collection efficiency. Higher turnover ratios such as 13.24 in June 2017 and 15.82 in June 2020 suggest quicker collection periods, whereas lower ratios like 6.1 in December 2017 and 6.24 in December 2019 indicate slower receivables conversion into cash. The recurring pattern of turnover ratios dropping in fourth quarters and recovering thereafter is consistent with the observed seasonality in sales and receivables.

Net Sales Trends

There are pronounced seasonal effects with marked sales increases typically peaking in the fourth quarter of each year. Overall, net sales have increased over the multi-year period, with recent quarters in 2023 showing the highest levels recorded.

Post-peak quarters generally experience a decline in sales, reflecting normal business cycles and possible inventory adjustments.

Trade Accounts Receivable Patterns

Receivables fluctuate with sales but with noticeable deviations that could indicate changes in collection policy or customer payment behavior.

The receivables levels tend to increase before periods of high sales, potentially reflecting extended credit or accumulation of outstanding invoices.

Receivables Turnover Insights

The turnover ratios highlight variable collection efficiency, with higher ratios linked to stronger collection efforts or favorable credit terms in certain periods.

Seasonal trends emerge, with turnover ratios tending to be lower in fourth quarters corresponding to peak sales periods, likely due to increased credit sales and longer collection periods.

In summary, the data reflects a business exhibiting strong seasonality with high year-end sales and corresponding impacts on receivables and collection efficiency. The pattern of fluctuating receivables turnover ratios further emphasizes the cyclic nature of collection dynamics. Recent years indicate growth in sales volumes, alongside continued variability in working capital management metrics.

Cost of Sales

The cost of sales displays notable seasonal fluctuations with peaks typically occurring in the December quarters each year. Observing the trend from 2017 to 2023, there is a general upward trajectory in cost of sales values, reflecting potential growth or increased scale of operations. For example, the December 2017 cost was approximately 387 million USD, increasing over time to reach nearly 644 million USD by December 2023. Mid-year quarters tend to have relatively lower costs compared to year-end quarters, suggesting seasonality in the company’s sales or production cycles. Some quarters, such as March 2020, show a significant dip likely impacted by external factors such as market conditions or disruptions.

Trade Accounts Payable

Trade accounts payable also show a trend of increase over the period, with intermittent fluctuations likely due to changes in purchasing or payment terms. The data indicates strong variability, with values generally rising from approximately 230 million USD in mid-2017 to between 470 and 600 million USD in the latter part of the analyzed period. There are occasional sharp increases, as seen in September 2022 and June 2023, which may indicate changes in vendor credit policies or inventory acquisition strategies. The variations do not strictly follow seasonal patterns, suggesting other operational factors influencing payables.

Payables Turnover Ratio

The payables turnover ratio varies considerably across quarters, generally fluctuating between about 2.5 and 10.3 times. Higher turnover ratios, such as the peak of 10.34 observed in December 2017, indicate faster payment to suppliers or improved operational efficiency for that period. Conversely, lower ratios around 2.67 suggest slower payments or extended credit terms. Over time, the ratio does not demonstrate a clear linear trend but exhibits cyclical behavior, with peaks often coinciding with the end of the fiscal year quarters. This cyclical nature implies that payment policies or cash flow management practices may adjust according to seasonal business cycles or strategic financial planning.

Overall Insights

The data reflects a business experiencing seasonal demand patterns evidenced by peak cost of sales and turnover metrics in year-end quarters. The upward trend in both cost of sales and trade payables suggests an expanding operation or increasing cost base. The payables turnover ratio’s variability highlights dynamic payment behavior, possibly influenced by cash management strategies, supplier negotiations, or evolving credit terms. These insights collectively point to a company balancing growth with operational and financial management adaptations across different periods.

The financial data reveals several notable trends over the examined periods. Working capital has exhibited a general upward trajectory, increasing from $617,505 thousand at June 30, 2017, to $1,721,412 thousand by December 31, 2023. This reflects a substantial growth in the company's short-term assets relative to short-term liabilities, indicating improving liquidity and operational capacity over the years, although fluctuations occur between quarters.

Net sales demonstrate a clear seasonality, with peaks generally in the fourth quarter of each year. For example, from $810,478 thousand at December 31, 2017, sales reach $1,567,307 thousand by December 31, 2023, with intermediate quarterly fluctuations consistent with industry cycles or consumer demand patterns. The data also shows a consistent recovery and growth trend following the dip observed around the first quarter of 2020, likely associated with broader economic disruptions during that period.

The working capital turnover ratio, where available, reflects how efficiently the company uses its working capital to generate sales. This ratio fluctuates between approximately 1.84 and 3.12, showing variability in operational efficiency over time. Notably, the ratio dropped to its lowest point around the first quarter of 2021 (1.84), suggesting a period of reduced efficiency or increased investment in working capital relative to sales. It then recovers and stabilizes in the range of approximately 2.35 to 2.88 in subsequent quarters, indicating a return to more typical operating conditions.

Working Capital

Demonstrates a steady increase with some fluctuations, nearly tripling over the span of the data, signifying enhanced liquidity and possibly expanded operational scale.

Net Sales

Exhibits pronounced seasonality and consistent growth, with peaks in late-year quarters. The recovery after early 2020 is pronounced, indicating resilience or effective market adaptation.

Working Capital Turnover

Shows variability that mirrors operational efficiency changes; the dip in early 2021 followed by recovery may reflect strategic adjustments or external conditions impacting sales generation relative to working capital.

Overall, the data suggests a company experiencing growth in operational scale and sales, with seasonal sales patterns and fluctuations in short-term efficiency metrics. The recovery and subsequent stabilization in both working capital levels and turnover ratios after early 2020 disruptions highlight effective management responses to changing market conditions.

The inventory turnover ratio exhibits notable fluctuations over the observed periods. Initially, the ratio begins at 3.24, followed by a decline reaching its lowest points around 1.81 to 1.86 during late 2019 and late 2022. However, the ratio shows intermittent recoveries, peaking at values such as 4.21 in mid-2021 and 3.57 in early 2021. Overall, the data reflect a cyclical pattern with periods of both weakening and strengthening inventory turnover, indicating variability in how efficiently inventory is being managed or sold over time.

Correspondingly, the average inventory processing period demonstrates an inverse pattern relative to inventory turnover. Starting near 113 days, the number of days increases sharply to peak values exceeding 190 days in late 2017 and late 2022, signaling slower inventory movement during those periods. Thereafter, the period shortens significantly to around 87 days in mid-2021, suggesting improved inventory processing efficiency. Nonetheless, the metric continues to oscillate between higher and lower values, evidencing inconsistent trends in inventory handling speed.

Inventory Turnover Ratio Trends

Shows a cyclical pattern with fluctuating efficiency; periods of low turnover around 1.8 to 2.0 contrast with spikes exceeding 4 times per period, indicative of varying sales velocity or inventory management.

Average Inventory Processing Period Trends

Inversely aligned with turnover ratios, the number of days fluctuates substantially between approximately 87 and 202 days, reflecting changes in the time inventory remains before sale.

Relationship Between Metrics

The inverse correlation between turnover ratio and processing period is consistent, affirming that when inventory turnover improves, the average days inventory is held decreases, and vice versa.

Insights

Such variability may arise from seasonal influences, market demand shifts, supply chain disruptions, or strategic inventory decisions. The peaks in processing period and troughs in turnover could indicate periods of inventory buildup or slower sales, while the opposite signals effective inventory liquidation.

Receivables Turnover Trend

The receivables turnover ratio exhibits a clear seasonal pattern, with higher values generally recorded in the quarters ending in June and September, and lower values during the quarters ending in December and March. This cyclical behavior suggests fluctuations in sales or collections efficiency corresponding to specific times of the year.

The ratio typically ranges from approximately 6 to over 15, with the highest turnover observed around June 2020 at 15.82 and relatively low points near December 2017 and December 2019, near 6. Notably, there has been a gradual improvement in the turnover ratio since early 2022, indicating a more efficient collection process or stronger sales recovery.

Average Receivable Collection Period Trend

The average collection period inversely mirrors the receivables turnover ratio, as expected. It increases noticeably around quarters with lower turnover and decreases when turnover is higher. Peaks in collection days are observed around 50 to 60 days, especially in December quarters, indicating slower collections during these periods.

Conversely, the shortest collection periods tend to occur in the middle of the year, with values dipping as low as 23 days in June 2020. Over the timeframe analyzed, collection days generally fluctuate between 23 and 60 days, with a tendency towards improvement in collection speed observed in recent quarters, particularly from 2022 onwards.

Overall Insights

The data reveals a recurrent seasonal pattern affecting receivables management, likely linked to sales cycles and customer payment behaviors. Periods with slower collection correspond to lower turnover ratios, highlighting timing challenges in the collection process during year-end and early-year quarters.

Recent trends suggest a strengthening in receivables management, with improved turnover ratios and shortened collection periods in the last several quarters, which may indicate enhanced operational efficiency or favorable market conditions. However, the persistence of seasonal fluctuations indicates an ongoing need for focused collection strategies during historically slower periods.

Average Inventory Processing Period

The average inventory processing period exhibits notable fluctuations over the analyzed quarters. Starting at 113 days in June 2017, it increases substantially to reach as high as 202 days by December 2019. Following this peak, a decline occurs, bringing the period down to 87 days by September 2021. Subsequent quarters reveal a resurgence, with values ascending again to 197 days at December 2022, before trending downward to 105 days by the end of 2023. This pattern suggests variability in inventory turnover rates, possibly influenced by seasonality, supply chain factors, or operational adjustments.

Average Receivable Collection Period

The average receivable collection period shows a generally variable pattern with no consistent trend throughout the timeline. Initial quarters present relatively low values around the mid-20s in days. However, spikes are noticeable, peaking above 50 and even reaching 60 days at certain points such as December 2017 and December 2019. Following these peaks, the period tends to revert near initial levels. This volatility might reflect changes in credit policies, customer payment behaviors, or economic conditions impacting collection efficiency.

Operating Cycle

The operating cycle mirrors some of the fluctuations observed in the inventory and receivables periods, reflecting combined effects. It begins at 141 days in June 2017 and escalates to a high of 261 days in December 2019. Subsequent quarters deliver a decline to near 118 days by March 2021, before rising again to levels exceeding 225 days in late 2022. Toward the end of 2023, the operating cycle decreases back to approximately 134 days. These swings indicate significant variations in the overall efficiency of converting inventory and receivables into cash, indicating periodic operational challenges and improvements over time.

The payables turnover ratio exhibits noticeable fluctuations across the analyzed periods. Initially, a high ratio of 10.34 was observed, which sharply declined to a range generally fluctuating between approximately 2.67 and 7.84 in subsequent quarters. The variability suggests changes in the company's efficiency in settling payables, with no consistent upward or downward trend but rather intermittent increases and decreases.

Correspondingly, the average payables payment period displays an inverse pattern relative to the payables turnover ratio. Starting from a relatively low figure of 35 days, the payment period increased substantially in later periods, reaching values above 100 days in multiple quarters. The longest payment periods extend above 130 days in some quarters, indicating that payables are being settled over longer durations compared to earlier periods.

The inverse relationship between payables turnover and the payment period is evident, as periods with higher turnover ratios correspond to shorter payment periods, and vice versa. This dynamic suggests variations in the company’s payment policy or cash flow management strategies over time, potentially influenced by operational or financial considerations.

Overall, the data points toward a less consistent management of accounts payable over the viewed timeframe, with periodic shifts toward either faster or slower payment cycles. This pattern may impact supplier relationships and working capital management, requiring further investigation into underlying causes for these fluctuations.

The data reveals several key trends in the company's cash flow efficiency and operational metrics over the evaluated periods.

Average Inventory Processing Period

This metric shows considerable variability, peaking around late 2017 to early 2018 and again in late 2022 with values exceeding 190 days, indicating slower inventory turnover during these times. Conversely, there are troughs such as in mid-2021 where the period reduces to around 87 days, signifying faster inventory processing. The fluctuations suggest challenges in inventory management possibly affected by seasonality or supply chain variations.

Average Receivable Collection Period

This period generally oscillates between approximately 23 and 60 days, with elevated values recurring around year-end 2017 and intermittent spikes through 2020. The collection period shortens in mid-2020 and mid-2021, indicating improved efficiency in receivables collection during these intervals. Overall, the metric reflects moderate consistency with occasional elongations likely driven by changes in customer payment behaviors or credit policies.

Average Payables Payment Period

The company exhibits a wide range in its payables payment period, from as low as 35 days to highs exceeding 130 days, particularly notable in the periods spanning 2018 to 2022. This extension suggests a strategic deferral of payments to suppliers at times, potentially to optimize cash outflows. However, fluctuations emphasize variability in payment terms or supplier negotiations, which may impact supplier relationships or credit terms.

Cash Conversion Cycle (CCC)

The CCC generally ranges from around 35 days up to 149 days, reflecting varying efficiency in converting inventory and receivables into cash while managing payable obligations. Notably, the lowest CCC values occur in early to mid-2021 and again towards the end of 2023, indicating peak operational efficiency in cash flow management. Conversely, spikes seen at year-end 2017 and late 2022 imply slower cash conversion, potentially influenced by prolonged inventory and receivable periods combined with fluctuating payables duration.

In summary, the company's operational liquidity metrics reveal a pattern of substantial variation over the periods analyzed. While certain intervals show improved efficiency with lower inventory days and cash conversion cycles, other times reflect extended durations that may tie up working capital. These trends underscore the dynamic nature of the company's supply chain, receivables policies, and payment management strategies, highlighting areas where further optimization could enhance cash flow performance.