Deckers Outdoor Corp. (NYSE:DECK)

Net Cash Provided by Operating Activities

The net cash generated from operating activities exhibited a fluctuating trend over the six-year period. Starting at $327.4 million in 2018, it increased slightly in 2019 to approximately $359.5 million. In 2020, there was a notable decline to $286.3 million, followed by a significant surge in 2021 to $596.2 million, the highest value in the dataset. However, 2022 saw a sharp decrease to $172.4 million, before recovering substantially in 2023 to $537.4 million. This pattern suggests variability in operating cash inflows, potentially influenced by business cycles or extraordinary items, with a strong rebound capability evident in the latest period.

Free Cash Flow to the Firm (FCFF)

Free cash flow to the firm closely mirrored the movements observed in operating cash flows. Beginning at $294.6 million in 2018, it increased steadily to $333.5 million in 2019, followed by a decrease to $256.4 million in 2020. There was a pronounced increase in 2021 to $566.3 million, aligning with the peak in operating cash flow during the same year. Subsequently, FCFF dropped significantly to $122.8 million in 2022, the lowest point across the data, before rising again to $457.9 million in 2023. The trajectory of FCFF indicates periods of both growth and contraction in available cash after accounting for capital expenditures, reflecting the company’s varying investment levels and operating performance.

Effective Income Tax Rate (EITR)

The effective income tax rate exhibited notable fluctuations over the analyzed period. Beginning at a high of 48.17% in the fiscal year ending March 31, 2018, the rate significantly decreased to 19.65% the following year. This lower level was largely maintained through 2019 and 2020, with slight variations to 18.99% and then an increase to 23.72% in 2021. In the most recent years, the rate slightly declined to 19.96% in 2022 before rising again to 22.41% in 2023. Overall, the tax rate moved from an initially elevated level to more moderate rates in the range of approximately 19–23%, indicating a stabilization after initial volatility.

Cash Paid During the Period, Interest, Net of Tax (in thousands of US$)

Cash interest payments, net of tax, showed variability through the years under review. Starting at $1,956 thousand in 2018, this figure increased sharply to $3,062 thousand in 2019, representing the peak in the dataset. Subsequently, the cash paid for interest declined to $1,998 thousand in 2020 and then experienced a small increase to $2,236 thousand in 2021. In the final two years, there was a downward trend with payments dropping to $1,474 thousand in 2022 and slightly more to $1,459 thousand in 2023. These fluctuations may reflect changing debt levels, interest rates, or refinancing activities, with a peak followed by a gradual reduction in cash outflows related to interest expense.

The analysis of the financial metrics reveals several notable trends over the six-year period.

Enterprise Value (EV)

There is a general upward trajectory in the enterprise value, starting from approximately 2.95 billion USD in March 2018 and reaching over 11.18 billion USD by March 2023. The most significant increase occurred between March 2020 and March 2021, where EV nearly doubled from about 4.86 billion to 8.24 billion USD. However, there was a marked decrease the following year, dropping to around 6.44 billion USD as of March 2022, before sharply rising again to the peak level in 2023.

Free Cash Flow to the Firm (FCFF)

The free cash flow to the firm exhibits a less consistent pattern compared to enterprise value. FCFF increased from 294.6 million USD in 2018 to a peak of 566.3 million USD in 2021. Following this peak, there was a significant decline to 122.8 million USD in 2022, which was partially recovered to 457.9 million USD by 2023. The data suggest fluctuations in cash generation capacity, although the overall level remains positive throughout.

EV/FCFF Ratio

The EV to FCFF ratio demonstrates considerable volatility. Initially, the ratio fluctuated moderately between 10.02 and 18.97 from 2018 to 2020. In 2021, the ratio decreased to 14.55, reflecting improved free cash flow relative to enterprise value. However, in 2022, this ratio sharply increased to 52.43, indicating a disproportionate increase in valuation relative to cash flow, likely driven by the significant drop in FCFF. In 2023, the ratio declined to 24.43, suggesting a partial correction as free cash flow rebounded, though the ratio remains elevated compared to earlier years.

Overall, the data indicate substantial growth in enterprise value accompanied by variability in cash flow generation. The sharp fluctuations in the EV/FCFF ratio point to periods of valuation divergence relative to cash flow, warranting further analysis into underlying business and market factors driving these changes.