Deckers laces up a 6-for-1 stock split
More than a month after shares of Goleta-based Deckers Brands dashed past $1,000 per share, the shoe brand firm announced it has approved a six-for-one forward stock split.
Deckers’ board of directors approved the decision on July 12 and also approved a proportionate increase in the number of authorized shares of common stock and preferred stock to accommodate the stock split, according to the press release.
The decision still needs additional approval from the company’s shareholders and Deckers will seek that approval at its upcoming annual meeting of stockholders which is to be held on Sept. 9.
If the firm’s shareholders approve the proposal, the shares are expected to begin trading on a split-adjusted basis Sept. 9 following the annual meeting.
If approved in a vote by shareholders, this will be the second stock split executed by Deckers as the company previously split its stock on a three-for-one basis in 2010.
The reason for the stock split is due to the high trading price of Deckers shares, CEO Dave Powers said in a press release.
“The trading price of our common stock has risen significantly over the past several years as a result of our strong financial performance and the execution of our strategic plan. We believe effecting the forward stock split will make the shares of our common stock more affordable and attractive to a broader group of potential investors, including our employees, and increase the liquidity of the trading of the shares of our common stock,” Powers said in a press release.
Powers announced earlier this year that he will be stepping down on Aug. 1 and replaced by Stefano Caroti, who iscurrently chief commercial officer.
In May, for the first time in company history, Deckers shares went past $1,000 a share.
In fact, on May 28, shares were worth $1,079.14, giving the Goleta-based shoemaker a market capitalization of $27 billion, placing the company firmly in third of the Central Coast’s 35-based public companies.
Deckers shares closed as high as $1,093.26 on June 3. As of July 16 close, Deckers shares closed at $912.87.
Shares are up more than 3% since the company’s announcement.
While stocks passing the $1,000 mark is a bit rare, it is nonetheless “simply a number,” George Tharakan, a co-founder and chief investment officer of Alamar Management Capital in Santa Barbara, told the Business Times via email.
However, the point of the stock split is that companies increase the number of their outstanding shares by issuing more shares to current shareholders.
This, in turn, can help improve trading liquidity and make the stock seem more affordable.
A six-for-one stock split means that every share of common stock will be split into six shares of common stock, and every one share of preferred stock will be split into six shares of preferred stock.
This means if Deckers shares are worth $900 on Sept. 6, the record date for the stock split, then when on next open, shares will be worth $150 a share.
Deckers’ stock split comes after shares have risen 64% over the last 12 months and 415% in the past five years, propelled higher by strong sales of its premier products, Ugg and running shoe brand Hoka One One.
In fiscal year 2023, Deckers generated revenue worth $4.28 billion. In the fourth quarter of 2023, Deckers generated revenue worth $959.8 million with Hoka sales beginning to overtake Ugg sales, with the running shoes selling $533 million in the fourth quarter compared to Ugg sales of $361.3 million.
Deckers is also the latest in a string of companies to split its stock this year with the market hovering near all-time highs.
In recent months, Walmart, Nvidia, Chipotle Mexican Grill, and Williams-Sonoma have each announced stock splits this year.
email: jmercado@pacbiztimes.com
