Hoka One One continues its explosive momentum.
The athletic brand, which has been generating significant buzz in recent months, helped propel parent Deckers Outdoor Corp. to another quarter of positive sales and earnings growth.
For the period ended Sept. 30, Goleta, Calif.-based Deckers posted Q2 earnings of $2.71 per share, surpassing consensus bets of $2.34. Sales also jumped 8% to $542.2 million, compared with Wall Street estimates of $531 million.
“These results are above the high end of our guidance range due to the outperformance in the Hoka One One brand, as well as the strength seen through early shipments related to the Ugg brand’s domestic business,” CEO, president and director David Powers explained in a conference call with investors.
Ugg still raked in the lion’s share of revenues, which climbed 2.2% to $404.9 million in the second quarter. Men’s boots rose by a high-teens percentage, while the hybrid Fluff Yeah slide has proven to be a steady performer for the women’s line.
However, Hoka One One is increasingly gaining ground for Deckers: The sneaker brand’s sales shot up nearly 50% to $78.1 million, with revenues balanced domestically and internationally, as well as across wholesale and direct-to-consumer channels.
In particular, the company noted that Hoka’s Clifton and Bondi franchises recorded solid performances year over year, while newer styles like the Carbon X and Rincon have managed to lure in new consumers. The sneaker label has also been spotted on a growing roster of celebrities and style influencers, including Pippa Middleton, Reese Witherspoon and Winnie Harlow.
“Growth in the quarter was driven by new product launches and more-effective global brand marketing that resulted in new customer acquisitions,” Susquehanna Financial Group equity research analyst Sam Poser said in a distribution note. “We are confident that management will continue to prioritize brand sanctity over sales growth as Hoka expands.”
As such, Deckers has updated its financial guidance for the fiscal year 2020, raising it from the prior range of $2.1 billion to $2.125 billion in sales, to an estimated $2.115 billion to $2.14 billion.
“This increase in guidance reflects the strength and the momentum that we continue to see in the Hoka brand, with the raise related to the second-quarter performance as well as a lift on the balance of the year for the brand,” said CFO Steven J. Fasching. “Our expectations for Hoka have continued to climb, well beyond our original outlook for the year.”
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