The latest Deckers Brands quarterly update came with revised guidance for the full year on expectations Hoka and Ugg will perform better than previously forecast.
“The strength of demand for our Hoka and Ugg brands continued to drive exceptional performance, producing record revenue and earnings for Deckers in both the second quarter and first half of fiscal year 2024,” said Deckers CEO Dave Powers.
Deckers said for its current fiscal year, which ends March 31, net sales are projected to be $4.025 billion, compared to the previous forecast of $3.98 billion.
In the second quarter of fiscal year 2024, Deckers revenue increased to $1.09 billion, up 25% compared to the same period last year, and a new record for the company.
Hoka is now the top-selling footwear brand in the U.S. in the run specialty channel, Powers said, citing third-party data.
“Hoka has also quickly become the top running brand with key strategic partners in applicable doors,” he added.
Hoka’s Q2 sales increased to $424 million, up 27.3% compared to the prior-year period. The shoe brand’s direct-to-consumer business increased 46% for the quarter and experienced a “greater than 30% global increase in consumer acquisition,” according to Powers.
This is all in line with Deckers’ plan to grow Hoka into a multibillion dollar performance brand, Powers added.
Powers cited “strong growth” among 18- to 34-year-old retained consumers, which increased 70% in the United States.
“We believe some of this demand was fueled by Hoka having increased resonance in the back-to-school timeframe with college-age students,” Powers said. “Brand loyalty among this group is especially exciting given the increased potential lifetime value of repeat purchases.”
The company expects Hoka to post full-year revenue growth of above 20%.
In Q1, Hoka’s sales grew 27% to $420 million. It was the first time Hoka’s revenue eclipsed $400 million in a single quarter.
The company’s global wholesale business put up strong revenue growth in the second quarter, increasing 19% versus last year, driven by Decker’s two largest brands, Hoka and Ugg.
“Our wholesale accounts also continue to see incredible heat and momentum for our key styles across both brands,” Powers said. “With this strong consumer demand, selling for wholesale in the quarter included some accelerated fall seasonal shipments, benefiting our first-half results, and increasing our confidence to achieve our outlook for the fiscal year.”
Powers added that Deckers is controlling wholesale for Hoka in the coming Q3 period, because the company wants the market to expect Hoka to launch new product in Q4.
“Wholesale is still strong, but in the U.S. we’re managing that tightly to create the excitement and the awareness, but still really ultimately drive the business to DTC,” Powers said. “And that’s a formula we’re going to continue to lean on going forward.”
Ugg Sales Also Strong
Ugg net sales were $610.5 million, up 28.1% compared to the prior-year period.
Teva Sales Drop Double Digits
Sandal brand Teva’s sales were $21.5 million, down 28.4% compared to the prior-year quarter. Deckers has reduced its expectation for the brand “due to softening macro backdrop.”
Deckers Puts Sanuk Up for Sale
Sanuk posted sales of $5.4 million, down 28.5% compared to prior-year quarter. Deckers is shopping for a buyer for Sanuk as it looks to capitalize on momentum around its two largest brands and the sneaker market.
Bart Schaneman can be reached at firstname.lastname@example.org.