Deckers Outdoor shares dash ahead on surging demand for Hoka shoes

Nordstrom

25/10/2024 11:45

Oct 25 (Reuters) - Deckers Outdoor  DECK.N  shares
jumped about 15% in premarket trading on Friday after the
shoemaker raised its annual sales forecast and beat
second-quarter expectations, on resilient demand.
    Trendy and innovative brands such as Hoka, UGG, New Balance
and Roger Federer-backed On  ONON.N  are a hit among  consumers,
especially in the running category, and has eaten into the
market share of giants such as Nike  NKE.N . 
    Deckers reported a nearly 35% jump in Hoka sales in the
second quarter, while the UGG brand rose 13%.
    "DECK continues to deliver strong results in an uncertain
macro operating environment, speaking to its strong market
position with a healthy brand portfolio that can continue to
drive growth longer-term," Dana Telsey, analyst with Telsey
Advisory Group said.
    Hoka has been gaining shelf space at Dick's Sporting Goods
 DKS.N  and Nordstrom  JWN.N  as the retailers replenish their
stock with consumer favorites.
    "The company is executing well in driving brand heat and
elevating global brand awareness and view higher marketing
investments as an important strategic decision that should
continue to support top line growth," Joseph Civello, analyst
with Truist Securities said.
    Deckers expects annual sales to rise 12% to $4.8 billion,
compared with previous forecast of 10% rise to $4.7 billion.
    Its quarterly net sales of $1.31 billion beat expectations
of $1.20 billion, while it posted adjusted profit of $1.59 per
share, compared to estimates of $1.23.
    Deckers' forward price-to-earnings ratio for the next 12
months, a common benchmark for valuing stocks, was 25.95,
compared with Nike's  NKE.N  26.59 and On's  ONON.N  43.62.

 (Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Arun
Koyyur)
 ((AnujaBharat.Mistry@thomsonreuters.com;))