Deckers Brands has a new power pair.
The California-based firm on Thursday posted better-than-expected first-quarter results driven by the strength of longtime hero brand Ugg and rising star Hoka One One.
Ugg — which seems to be emerging from a period of softness as it looks to shed the seasonality of its business — saw sales advance 19 percent to $136.5 million. Revenues at Hoka One One surged 53 percent to $47 million, marking a pattern of blockbuster growth for the running sneaker label. (In Q4, Hoka One One’s sales were also up 34.1 percent to $50.4 million; while Ugg’s improved 6 percent to $257.5 million.)
“The Ugg spring/summer business experienced improved full-price selling during the [first] quarter compared to years past, driving higher sales as well as gross margin gains,” Deckers president and CEO Dave Powers told investors during a conference call on Thursday. “The strength of Ugg’s spring/summer business in this past quarter demonstrates that our efforts on evolving the product offering and reaching new consumers is paying off, and I’m optimistic that this signals our strategy of developing Ugg into a year-round brand is working.
On Hoka One One, Powers said he sees a “long runway for growth internationally” for the brand, as its international business was up “significantly” year over year.
“Domestic sales also increased substantially as the brand continues to take shelf space and market share, as well as benefit from a more frequent replenishment cycle,” he added, calling out the recently launched Clifton 5 as a major driver of sales gains.
Overall, Deckers sales increased 20 percent during the period to $250.6 million, topping analysts’ forecasts for sales of $227 million. The firm narrowed its reported net loss to $32.5 million, or $1 per diluted share, from a loss of $44.3 million, or $1.32 per diluted share last year.
On an adjusted basis, net losses were 98 cents per share, better than Wall Street’s bet of a loss of $1.42 per share.
On the heels of the positive results, Deckers improved its forecast for the fiscal year. It now expects revenue in the range of $1.93 billion and $1.96 billion, compared with the previous range of $1.93 billion and $1.95 billion. Adjusted diluted earnings per share are now expected to be in the range of $6.25 to $6.45, compared with the prior range of $6.20 to $6.40.