Deckers Outdoor raised its annual profit forecast after beating first-quarter estimates on Thursday, betting on strong demand for the footwear and apparel firmâs Hoka sneakers and Ugg boots.
Why Is It Important?
Brands such as On Holding and Deckers are gaining popularity as their new and innovative products are attracting more younger customers at a time when sportswear giants such as Nike are taking a hit.
Context
Earnings reports of several retailers have indicated that customers are selectively shopping for non-essential products they have been coveting, even as sticky inflation strains household budgets.
Retailers such as Dickâs Sporting Goods and Nordstrom have both seen demand increase for Hoka and Onâs fashionable products.
Key Quotes
âHoka and Ugg continue to drive robust full-price demand in the global marketplace by delivering compelling product that consumers love,â said CEO Dave Powers.
Market Reaction
Deckersâ shares, which have risen nearly 26 percent this year, were up about 8.4 percent in extended trading.
âI think the figures continue to be positive … thereâs room for growth for Hoka and Ugg continues to do very well. Itâs a well run business,â said Jane Hali & Associates analyst Jessica Ramirez.
By The Numbers
Deckers now projects annual earnings per share in the range of $29.75 to $30.65, compared to its prior forecast of $29.50 to $30.
It continues to expect net sales for fiscal 2025 to grow 10 percent to $4.7 billion.
Net sales came in at $825.3 million, compared to estimates of $807.9 million.
The company posted earnings per share of $4.52. Analysts on average had expected $3.48 per share, according to LSEG data.
Sales at Hoka jumped 29.7 percent, while Ugg banner climbed 14 percent.
Its direct-to-consumer channel saw sales surge 24 percent, while wholesale business soared 21 percent.
By Granth Vanaik; Editor: Sriraj Kalluvila
Learn more:
How Hoka Fends Off the Imitators
The brandâs quirky running sneakers are no longer a novelty as rivals like Nike, Adidas and On launch similar styles. Yet sales continue to soar as consumers embrace its winning formula of comfort, versatility and unconventional looks.
