Deckers' shares surge over company's bet on full-price sales of Hoka, UGG footwear (updated)

Nordstrom

26/07/2024 15:42

(Updates shares and adds analyst comment in paragraph 5)
    By Ananya Mariam Rajesh
       July 26 (Reuters) - Deckers Outdoor  DECK.N  shares
jumped as much as 17% on Friday, after multiple brokerages
raised their price targets following the company's bet on
full-price sales of its hot-selling Hoka running shoes and UGG
boots to raise its annual profit forecast.
    The stock touched a one-month high of $980 and is on track
for its best day in nine months, if gains hold. Shares of On
Holding  ONON.N , backed by Tennis star Roger Federer, and Nike
 NKE.N  were up 6.2% and 1.7%, respectively. 
    Products from brands such as Hoka and On, like the Clifton 9
and Cloudmonster 2 which are known for their extra cushion and
durability, have largely resonated with customers, mainly in the
running category.
    "Even in a choppier macro environment people are spending
money on things they care about and these two are products that
people care about," said Truist Securities analyst Joseph
Civello.     
    Civello added Hoka has "incredibly designed shoes" with
different growth opportunities as the brand has also developed a
fashion-following with people interested in buying their newest
color shoes.
    Truist Securities increased Deckers' price target to $1,225
from $1,200, and is the highest on Wall Street. 
    Retailers such as Dicks Sporting Goods  DKS.N  and Nordstrom
 JWN.N  have also responded by offering more shelf space for
those brands while trimming down on Nike's products, which are
lagging in terms of innovation and appeal to customers.
    Deckers reported a nearly 30% rise in Hoka sales in the
first quarter, driven by demand in wholesale channels. The UGG
banner had a 14% jump in sales. 
    Wedbush analyst Tom Nikic wrote in a note there has been
less discounting with the UGG brand and it appears to be taking
a share in the sandal market.
    Deckers now expects annual profit in the range of $29.75 to
$30.65, compared with its previous forecast of $29.50 to $30.

    
    
    

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Deckers and On have outperformed bigger sportswear rivals YTD   
https://reut.rs/3Whv5Bz
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 (Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by
Krishna Chandra Eluri)
 ((AnanyaMariam.Rajesh@thomsonreuters.com ; Twitter: https://twitter.com/AnanyaMariam;))