Deckers Outdoor shares surge as full-price sales of Hoka, UGG footwear help raise FY profit forecast

On Holding AG

26/07/2024 11:56

July 26 (Reuters) - Deckers Outdoor  DECK.N  shares
jumped 11% to $932 before the bell on Friday after the
sportswear company raised its annual profit forecast, betting on
full-price sales of its hot-selling Hoka running shoes and UGG
boots.
    Products from brands such as Hoka and Tennis star Roger
Federer-backed On Holding  ONON.N , like the Clifton 9 and
Cloudmonster 2 that are known for their extra cushion and
durability, have largely resonated with customers, mainly in the
running category.
    Retailers such Dicks Sporting Goods  DKS.N  and Nordstrom
 JWN.N  have responded by offering more shelf space for those
brands while trimming down on Nike's  NKE.N  products, which are
lagging in terms of innovation and appeal to customers.
    Deckers, which has poured money into product innovation, has
launched various new styles under Hoka with franchises such as
Mach and Transport, resulting in a nearly 30% rise in sales in
the first quarter.
    "Hoka remains focused on driving demand through model
updates, special collaborations and limited-edition launches,
which bring incremental demand and often sell out," Telsey
Advisory Group analyst Dana Telsey said. 
    The UGG banner also had a 14% jump in sales. Wedbush analyst
Tom Nikic wrote in a note that there has been less discounting
with the 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.
    "Continued full-priced selling should support both the top
line and earnings, even while the company invests in
top-of-funnel marketing to grow awareness and expand
direct-to-consumer," Barclays analyst Adrienne Yih said.
    In the first quarter, Deckers' net sales were $825.3
million, topping LSEG estimates of $807.9 million. Its earnings
per share of $4.52 also beat expectations of $3.48. 
    
    
    

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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;))