Deckers shares rise after analyst raises estimates

The company known for its popular Uggs sheepskin boots and Teva sandals, had strong first-quarter results, said RBC Capital Markets analyst Howard Tubin, as full-price selling of Uggs drove an improvement in gross margin.

"We continue to believe that in the currently difficult environment, softlines companies who sell unique product or operate unique brands can continue to outperform and Deckers Outdoor is a prime example," he wrote.

Last week, the Goleta, Calif.-based company said it would buy Tsubo LLC, a footwear company that sells high-end casual shoes, adding to its unique product offering.

"While we do not expect this acquisition to affect the company's earnings this year, we believe the shoe brand may be an attractive addition to its current portfolio in the longer term," wrote Tubin.

He raised his 2008 earnings estimate to $6.40 per share from $6.10, and upped his 2009 estimate to $7.46 per share, from $6.95.

The increase reflects continued strength in the company's brands, particularly in the second half of the year, Tubin wrote.

Analysts polled by Thomson Financial, on average, expect 2008 earnings of $6.47 per share and 2009 earnings of $7.72 per share.

"We remain optimistic with regard to the DECK story and would continue to be buyers of the stock," Tubin wrote, using the company's Nasdaq Stock Market ticker.

Shares rose $5.81, or 4.3 percent, to $140.86 during midday trading. The stock has traded between $78.57 and $166.50 during the past 52 weeks.