Deckers Outdoor shares dash ahead on surging demand for Hoka shoes (updated)

Nordstrom

25/10/2024 14:37

(Adds analyst comments in paragraph 3, 6 and 7, updates share
movement to market open)
    By Anuja Bharat Mistry
       Oct 25 (Reuters) - Deckers Outdoor  DECK.N  shares
jumped about 11% on Friday after the shoemaker raised its annual
sales forecast betting on strong demand for its shoes and boots
during the crucial holiday season.
    Trendy and innovative brands such as Deckers' Hoka, New
Balance and Roger Federer-backed On  ONON.N  are a hit among
consumers and have dented the market share of giants such as
Nike  NKE.N  in the running category.
    Barclays analyst Adrienne Yih said strong wholesale and
store sales and early strength in the back-to-school season
bodes well for a robust holiday season "despite near-term
headwinds such as freight expenses".
    Sales of Deckers' UGC boots rose 13% in the second quarter
and Hoka sales jumped 35%, driven by demand for its Clifton and
Bondi shoes. 
    Its Hoka shoes have been gaining shelf-space at Dick's
Sporting Goods  DKS.N  and Nordstrom  JWN.N  as the retailers
replenish their stock with consumer favorites.
    Hoka's recent products such as Skyward X and Cielo X1 have
been able to penetrate the $200 plus price point, enhancing
margin projections, KeyBanc Capital Markets analyst Ashley Owens
said, while UGG is seeing year-round demand for Tasman and Ultra
Mini styles.
    Deckers expects annual sales to rise 12% to $4.8 billion,
compared with previous forecast of 10% rise to $4.7 billion.
    Its 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.
    "Deckers 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.


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Shares of Deckers Outdoor has outperformed sportswear makers   
https://reut.rs/3A8YvuB
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 (Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Arun
Koyyur)
 ((AnujaBharat.Mistry@thomsonreuters.com;))